
 




 
 
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
 
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended
March 31, 2024
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period
from___________ to___________
 
Commission file number
000-27251
 
QDM International Inc.
(Exact name of registrant
as specified in its charter)
 
  Florida   59-3564984  (State or other jurisdiction of   (I.R.S. Employer  incorporation or organization)   Identification No.)         Room 1030B, 10/F, Ocean Centre, Harbour City 5 Canton Road, Tsim Sha Tsui, Hong Kong   -  (Address of principal executive offices)   (Zip Code)         + 852 34886893  (Registrant’s telephone number, including area code) 
 
Securities registered pursuant
to Section 12(b) of the Act: None
 
Securities registered pursuant
to Section 12(g) of the Act: Common Stock, par value $0.0001
 
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒
 
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☒
 
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
 
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files) Yes ☒ No ☐
 
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
  Large accelerated filer ☐ Accelerated filer ☐  Non-accelerated filer ☒ Smaller reporting company ☒      Emerging growth company ☐ 
 
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
 
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
 
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
 
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
 
The aggregate market value of the voting and
non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold on the OTCQB
Venture Market operated by the OTC Markets as of September 29, 2023 ($2.50) was approximately $54,526,325.
 
As of July 1, 2024, 291,563,930 shares of common
stock, $0.0001 par value per share, of the registrant were issued and outstanding.
 

 
 


 
 

 
QDM INTERNATIONAL
INC.
ANNUAL REPORT ON FORM
10-K
FOR THE YEAR ENDED
MARCH 31, 2024
 
TABLE OF CONTENTS 
 


CERTAIN TERMS AND CONVENTIONS
ii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
iii

 
 

PART I
 
1

 
 
 

Item 1.
Business
1

Item 1A.
Risk Factors
20

Item 1B.
Unresolved Staff Comments
38

Item 1C
Cybersecurity
38

Item 2.
Properties
38

Item 3.
Legal Proceedings
38

Item 4.
Mine Safety Disclosures
38

 
 
 

PART II
 
39

 
 
 

Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
39

Item 6.
[Reserved]
40

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
40

Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
44

Item 8.
Financial Statements and Supplemental Data
44

Item 9.
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
44

Item 9A.
Controls and Procedures
45

Item 9B.
Other Information
45

Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
45

 
 
 

PART III
 
46

 
 
 

Item 10.
Directors, Executive Officers and Corporate Governance
46

Item 11.
Executive Compensation
48

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
49

Item 13.
Certain Relationships and Related Transactions, and Director Independence
50

Item 14.
Principal Accountant Fees and Services
51

 
 
 

PART IV
 
52

 
 
 

Item 15.
Exhibits, Financial Statement Schedules
52

Item 16.
Form 10-K Summary
52

 
 
 

SIGNATURES
 
53

 


i
 

 
CERTAIN TERMS AND CONVENTIONS
 
Unless otherwise indicated or the context otherwise
requires, references in this Annual Report on Form 10-K (the “Report”) to:
 


 
●
“24/7 Kid” are to 24/7 Kid Doc, Inc., a Florida corporation
    and wholly-owned subsidiary of the Company, which was dissolved in September 2022; 

 
 
 

 
●
“BVI” are to the British Virgin Islands;

 
 
 

 
●
“China” or the “PRC”  are to the
    People’s Republic of China, including Hong Kong, the special administrative region of Macau and Taiwan, unless in the context
    of describing PRC laws, regulations and other legal or tax matters in this annual report, excluding Taiwan, Hong Kong, and the special
    administrative region of Macau; 

 
 
 

 
●
“Hong Kong” are to the Hong Kong Special Administrative
    Region of the People’s Republic of China;

 
 
 

 
●
“Common stock” are to the common stock of the Company,
    par value $0.0001 per share; 

 
 
 

 
 
 

 
●
“HKD,” “HK$” and “Hong Kong dollars”
    are to the legal currency of Hong Kong;

 
 
 

 
●
“Lutter Global Limited” or “LGL” are to Lutter
    Global Limited, a BVI company and a wholly-owned subsidiary of the Company;

 
 
 

 
●
“mainland China” are to the People’s Republic of
    China, excluding Hong Kong, Macau and Taiwan;

 
 
 

 
●
“QDM BVI” are to QDM Holdings Limited, a BVI company and
    a wholly-owned subsidiary of the Company;

 
 
 

 
●
“QDM HK” are to QDM Group Limited, a Hong Kong corporation
    and a wholly-owned subsidiary of QDM BVI;

 
 
 

 
●
“QDM” are to QDM International Inc., a Florida corporation;
    

 
 
 

 
●
“Series C Preferred Stock” are to the Series C Convertible
    Preferred Stock, par value $0.0001 per share, of the Company, each convertible into approximately 3.67 shares of common stock;

 
 
 

 
●
“technical representatives” are to licensed individuals
    who provide advice to an insurance policy holder or potential policy holder on insurance matters on behalf of an insurance agent
    or broker, or arrange contracts of insurance in or from Hong Kong on behalf of that insurance agent or broker;

 
 
 

 
●
“US$,” “U.S. dollars,” “$,” and
    “USD” are to the legal currency of the United States;

 
 
 

 
●
 the “Company,” “we,” “us,”
    and “our” are to QDM International Inc. and its consolidated subsidiaries, unless the context suggests otherwise; and

 
 
 

 
●
“YeeTah” are to Hong Kong YeeTah Insurance Broker Limited,
    formerly known as YeeTah Insurance Consultant Limited, a Hong Kong corporation and wholly-owned subsidiary of QDM HK.

 
QDM and QDM BVI maintain their books and records
in U.S. dollars and in accordance with generally accepted accounting principles of the United States. QDM HK and YeeTah maintain their
books and records either in U.S. dollars or Hong Kong dollars. The functional currency of Lutter Global Limited is the Euro.
 
This Report also contains translations of Hong
Kong dollars into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of Hong Kong dollars into
U.S. dollars were made at HK$7.80 = US$1.00, which is the prevailing exchange rate as of March 31, 2024. We make no representation that
the Hong Kong dollar or U.S. dollar amounts referred to in this Report could have been or could be converted into U.S. dollars or Hong
Kong dollars, as the case may be, at any particular rate or at all.
 
Due to rounding, numbers presented throughout
this annual report may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
 
In May 2020, we effected a reverse stock split
of all issued and outstanding shares of common stock and preferred stock of 24/7 Kid at a split ratio of 1-for-100 (the “2020 Reverse
Stock Split”). On August 10, 2021, we completed a one-for-thirty (1:30) reverse stock split, where every thirty (30) shares of
the Company’s issued and outstanding shares of common stock were automatically converted into one share of common stock, without
any change in the par value per share (the “2021 Reverse Stock Split”). The 2021 Reverse Stock Split reduced the number of
the Company’s issued and outstanding shares of common stock from approximately 6.24 million shares to approximately 0.2 million
shares. The number of authorized shares of common stock was not affected by the 2021 Reverse Stock Split. On April 5, 2024, we increased
the authorized shares of common stock, par value $0.0001 per share, from 200,000,000 shares to 700,000,000 shares and the authorized
shares of preferred stock, par value $0.0001 per share, from 5,000,000 shares to 30,000,000 shares; and completed a forward split of
the issued and outstanding shares of common stock at a ratio of 10-for-1 (the “2024 Forward Stock Split”). The share number
and related data in this Report has been updated to reflect the stock splits referenced above.
 


ii
 

 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This Report, including, without limitation, statements
under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”)
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements
can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,”
“expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,”
“predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable
terminology. These statements are based on management’s current expectations, but actual results may differ materially due to various
factors, including, but not limited to:
 

●the
                                            impact of political uncertainty and social unrest in Hong Kong and laws, rules and regulations
                                            of the Chinese government aimed at addressing such unrest;

 

●the
                                            market for our services in Hong Kong and Mainland China;

 

●our
                                            expansion and other plans and opportunities;

 

●our
                                            future financial and operating results, including revenues, income, expenditures, cash balances
                                            and other financial items;

 

●current
                                            and future economic and political conditions in Hong Kong and Mainland China;

 

●the
                                            future growth of the Hong Kong insurance industry as a whole and the professional insurance
                                            intermediary sector in particular;

 

●our
                                            ability to attract customers, further enhance our brand recognition;

 

●our
                                            ability to hire and retain qualified management personnel and key employees in order to enable
                                            them to develop our business;

 

●changes
                                            in applicable laws or regulations in Hong Kong related to or that could impact our business;

 

●our
                                            management of business through a U.S. publicly-traded and reporting company; and

 

●other
                                            assumptions regarding or descriptions of potential future events or circumstances described
                                            in this Report underlying or relating to any forward-looking statements.

 
The forward-looking statements contained in this
Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments
affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some
of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any
of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial
condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by
the forward-looking statements contained in this Report. We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
 


iii
 

 
PART I
 
Item 1. Business.
 
Overview 
 
QDM is a holding company incorporated in Florida
with no material operations of its own, and we conduct our insurance brokerage business through our indirectly wholly-owned subsidiary,
YeeTah, primarily in Hong Kong.
 
YeeTah sells a wide range of insurance products
consisting of two major categories: (1) life and medical insurance, such as individual life insurance; and (2) general insurance, such
as automobile insurance, commercial property insurance, liability insurance and homeowner insurance. In addition, as a Mandatory Provident
Fund (“MPF”) intermediary, YeeTah is also licensed to provide customers with assistance on account opening and related services
under the MPF and the Occupational Retirement Schemes Ordinance (“ORSO”) schemes in Hong Kong, which are retirement protection
schemes set up for employees who are Hong Kong residents.
 
YeeTah sells insurance
products underwritten by insurance companies operating in Hong Kong to individual customers who are either Hong Kong residents or visitors
from Mainland China and is compensated for its services by commissions paid by insurance companies, typically based on a percentage of
the premium paid by the insured. Commissions generally depend on the type and term of insurance products and the particular insurance
company, and they are usually paid by the insurance companies the next month after the cooling off period of the policies sold, which
is generally 21 days after the earlier of the delivery of the policy or the delivery of the cooling off notice to the policy holder,
during which period policy purchasers may cancel the policy at their discretion and receive refunds.
 
As of the date of this
Report, YeeTah is a party to agreements with 17 insurance companies in Hong Kong, and offers approximately 464 insurance products to
its individual customers. For the fiscal year ended March 31, 2024, approximately 96.5% of YeeTah’s total commissions was attributable
to one insurance company. For the fiscal year ended March 31, 2023, an aggregate of 99.1% of YeeTah’s total commissions was attributable
to its top two insurance companies.
 
During the fiscal year
ended March 31, 2024 and March 31, 2023, YeeTah had a total of 133 and 63 customers in life and medical insurance, respectively, and 33
and 23 individual customers in general insurance, respectively, as well as five and four customers for MPF related services, respectively.
As of the date of this Report, Yeetah has not provided any customer ORSO related services.
 
As an independent insurance
broker, YeeTah offers not only a broad range of insurance products underwritten by multiple insurance companies to address the diverse
needs and preferences of increasingly sophisticated customers but also provide a range of quality services covering insurance policy
application, customer information collection, analysis of policy selection, and after-sale services.
 
YeeTah focuses on offering
long-term life insurance products including endowment life and annuity life insurance and distributes general insurance products including
automobile insurance, individual accident insurance, homeowner insurance, liability insurance and travel insurance. All of YeeTah’s
sales of life and medical insurance products and general insurance products are conducted through its licensed salespersons (known in
Hong Kong as technical representatives).
 
Hong Kong’s independent
insurance intermediary market is experiencing rapid growth due to increasing demands for insurance products by the Chinese population,
especially visitors from mainland China. Although we do not sell any insurance products in mainland China or solicit any customer in
China, we intend to grow our business by offering premium services and recruiting talent to join our professional team and sales force,
expanding our distribution network through building more connections with business partners in Hong Kong and mainland China, such as
wealth management companies, funds, trust companies, and overseas immigration agencies.
 


1
 

 
Holding Company Structure
 
QDM is not an operating company but a Florida
holding company with operations primarily conducted through its indirectly wholly-owned subsidiary based in Hong Kong. Our investors
hold shares of common stock in QDM, the Florida holding company.
 
We do not have or intend to set up any subsidiary
or enter into any contractual arrangements to establish a variable interest entity (“VIE”) structure with any entity in China.
Our corporate organizational structure is as follows as of the date of this Annual Report:
 

 
Our holding company structure presents unique
risks as our investors may never directly hold shares in our Hong Kong operating subsidiary and we will be dependent upon dividends and
other distributions from our subsidiaries to finance our cash flow needs. Our ability to receive dividends and other contributions from
our subsidiaries may be significantly affected by regulations promulgated by Hong Kong and PRC authorities. Any change in the interpretation
of existing rules and regulations or the promulgation of new rules and regulations may materially affect our operations and or the value
of our securities, including causing the value of our securities to significantly decline or become worthless. For a detailed description
of the risks facing the Company associated with our structure, please refer to “Item 1A. Risk Factors – Risks Related
to Doing Business in Hong Kong.”
 
Currently, PRC laws and regulations do not prohibit
direct foreign investment in our Hong Kong operating subsidiary. Nonetheless, in light of the statements and regulatory actions by the
PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership
of companies incorporated in mainland China operating in certain industries, which are constantly evolving, and anti-monopoly concerns,
we may be subject to the risks of the uncertainty of any future actions of the PRC government in this regard, which would likely result
in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current
business, accept foreign investments, and offer or continue to offer securities to our investors, and the resulting adverse change in
value to our common stock. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the China
Securities Regulatory Commission, or CSRC, if we fail to comply with such rules and regulations, which would likely adversely affect
the ability of the Company’s securities to continue to trade on the OTCQB Venture Market operated by the OTC Markets Group Inc.
(the “OTCQB”), which would likely cause the value of our securities to significantly decline or become worthless.
 


2
 

 
The Holding Foreign Companies Accountable Act 
 
Pursuant to the Holding Foreign Companies Accountable
Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023, signed into law on December
29, 2022, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has
not been subject to inspections by the Public Company Accounting Oversight Board (United States), or the PCAOB, for two consecutive years,
the SEC will prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the
United States.
 
On December 16, 2021, the PCAOB issued a Determination
Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:
(i) China, and (ii) Hong Kong.
 
On August 26, 2022, the PCAOB announced and signed
a Statement of Protocol (the “Protocol”) with the CSRC and the Ministry of Finance of the People’s Republic of China.
The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects
and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete
audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and
take testimony from all personnel associated with the audits the PCAOB inspects or investigates.
 
On December 15, 2022, the PCAOB issued a new
Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB has been able to
conduct inspections and investigations completely in the PRC in 2022.
 
As of the date of this Report, our auditor, ZH
CPA, LLC, is not subject to the determinations as to inability to inspect or investigate completely as announced by the PCAOB on December
16, 2021 as they are not on the list published by the PCAOB. As a firm registered with the PCAOB, ZH CPA, LLC is headquartered in Denver,
Colorado, and is subject to laws in the United States which provide that the PCAOB shall conduct regular inspections to assess the auditor’s
compliance with the applicable professional standards. We have no intention of dismissing ZH CPA, LLC in the future or engaging any auditor
not based in the U.S. and not subject to regular inspection by the PCAOB. There is no guarantee, however, that any future auditor engaged
by the Company would remain subject to full PCAOB inspection during the entire term of our engagement. Each year, the PCAOB will determine
whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If it is later
determined that the PCAOB is unable to inspect or investigate our auditor completely, investor may be deprived of the benefits of such
inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit
work undertaken in China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality
control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. See
“Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong — Under the HFCAA, our securities may
be prohibited from being traded on any U.S. securities exchange, including the New York Stock Exchange and Nasdaq, or through any other
trading method within the SEC’s regulatory jurisdiction, including the OTC markets if our auditor is not inspected by the PCAOB
for three consecutive years, and this ultimately could result in trading in our securities being prohibited. Furthermore, on June 22,
2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and
require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor is
not subject to PCAOB inspections for two consecutive years instead of three” on page 30. 
 
Transfers of Cash and Other Assets to and from Our Subsidiaries
 
QDM is a holding company incorporated in Florida
with no material operations of its own, and we primarily conduct our insurance brokerage business through our indirectly wholly-owned
subsidiary, YeeTah, in Hong Kong. We may rely on dividends and other distributions on equity to be paid by our Hong Kong operating subsidiary,
YeeTah, to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our
shareholders, to service any debt we may incur and to pay our operating expenses. Currently, substantially all of our operations are
in Hong Kong. We do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a VIE structure
with any entity in mainland China. Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding
Hong Kong are reflected in the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (the
“Basic Law”), providing Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers,
including that of final adjudication under the principle of “one country, two systems.” The laws and regulations of the
PRC do not currently have any material impact on transfer of cash from us to YeeTah or from YeeTah to us and the investors in the U.S.
In addition, there are no restrictions or limitations under the laws of Hong Kong imposed on the conversion of Hong Kong dollar into
foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S investors.
 


3
 

 
We are permitted under the Florida law to provide
funding to our subsidiaries, including YeeTah, through loans or capital contributions without restrictions on the amount of the funds.
There are no restrictions or limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the
U.S. investors or to settle amounts owed. YeeTah is permitted under the laws of Hong Kong to provide funding to QDM HK and QDM BVI, the
holding company incorporated in Hong Kong and the British Virgin Islands, respectively, through dividend or other distribution without
restrictions on the amount of the funds, subject to availability of distributable profits and sufficient cash to maintain going concern
and solvency of YeeTah and any contractual obligations owed to third parties prohibiting or restricting dividend distributions. As of
the date of this Report, there has been no dividends or distributions between our holding company and our subsidiaries nor do we expect
such dividends or distributions to occur in the foreseeable future among our holding company and its subsidiaries.
 
However, the PRC government has significant authority
to intervene or influence the China operations of an offshore holding company at any time, and such oversight may also extend to our
Hong Kong operating company. We cannot assure you that the PRC government will not prevent us from transferring the cash we maintain
in Hong Kong outside of Hong Kong, or restrict our ability to deploy our cash into business or to pay dividends. We could also be subject
to limitations on the transfer or the use of our cash if we expand our business operations into mainland China or conduct our operations
in some other ways such that we become subject to PRC laws that regulate these activities. In addition, if YeeTah incurs debt on its
own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to
us. Any limitation on our ability to transfer or use our cash could materially and adversely limit our ability to grow, make investments
or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
 
We have never paid or declared any cash
dividends on our common stock. We currently intend to retain all available funds and future earnings, if any, for the operation and
expansion of our business and do not anticipate paying cash dividends in the foreseeable future. The declaration of dividends on any
class of shares is within the discretion of our board of directors, subject to the Florida law, out of legally available funds, and
will depend on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. If
we determine to pay dividends on any of our capital stock in the future, we will be dependent on receipt of funds from our Hong Kong
operating subsidiary, YeeTah. None of our subsidiaries has made any dividends or distributions to us. Under the current practice of
the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. See “Item
1A. Risk Factors – Risks Related to Our Business and Industry – We rely on dividends and other distributions on equity
paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our
subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business” on page
25 and “Item 1A. Risk Factors – Risks Related to Doing Business in Hong Kong - Our Hong Kong subsidiaries may
be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity
requirements, conduct business and pay dividends to holders of our common stock. Dividends payable to our foreign investors and
gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC” on page
27.
 
Regulatory Permissions and Developments
 

Our PRC counsel has advised us that the laws and
regulations of the PRC do not currently have any material impact on our business, financial condition or results of operations. However,
there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future.
If there is a significant change to current political arrangements between mainland China and Hong Kong, companies operating in Hong Kong
such as us may face similar regulatory risks as those operated in mainland China, including their ability to offer securities to investors,
list their securities on a U.S. or other foreign exchange, conduct their business or accept foreign investment. In light of China’s
expansion of authority in Hong Kong, there are risks and uncertainties which we cannot foresee for the time being, and rules and regulations
in China can change quickly. The Chinese government may intervene or influence our current and future operations in Hong Kong or may exert
more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves. See “Item 1A. Risk Factors
– Risks Related to Doing Business in Hong Kong.”
 


4
 

 
The PRC government initiated a series of regulatory
actions and statements to regulate business operations in certain areas in mainland China with little advance notice, including cracking
down on illegal activities in the securities market, enhancing supervision over mainland China-based companies listed overseas using
variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in
anti-monopoly enforcement.
 
For example, on June 10, 2021, the Standing Committee
of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data
collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing
activities must be conducted based on data classification and hierarchical protection system for data security.
 
On July 6, 2021, the General Office of the Communist
Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on certain activities
in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant
governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over
China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities
laws.
 
On August 20, 2021, the 30th meeting of the Standing
Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s
Republic of China,” or “PRC Personal Information Protection Law,” which became effective on November 1, 2021. The PRC
Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China
that is carried out outside of China where (i) such processing is for the purpose of providing products or services for natural persons
within China, (ii) such processing is to analyze or evaluate the behavior of natural persons within China, or (iii) there are any other
circumstances stipulated by related laws and administrative regulations.
 
On December 28, 2021, the Cyberspace Administration
of China (the “CAC”) jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which
took effect on February 15, 2022, replacing the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for
Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services,
and online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying
out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform
operator who controls more than one million users’ personal information must undergo a cybersecurity.
 
On July 7, 2022, the CAC issued the Measures
for the Security Assessment of Cross-border Transfer of Data, which stipulates that data processor who provides overseas the important
data collected and generated during operations within the PRC and personal information that shall be subject to security assessment shall
conduct a security assessment. Furthermore, if the data processor provides data overseas and meets one of the following circumstances,
it shall declare the security assessment: (i) where a data processor provides critical data abroad; (ii) where a key information
infrastructure operator or a data processor processing the personal information of more than one million people provides personal information
abroad; (iii) where a data processor has provided personal information of 100,000 people or sensitive personal information of 10,000
people in total abroad since January 1 of the previous year; and (iv) other circumstances prescribed by the CAC for which declaration
for security assessment for outbound data transfers is required.
 
On February 17, 2023, with the approval of the
State Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, (i)
domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with
the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings
or listing applications. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies
any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify,
warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons
may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria,
the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic
company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its
audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies; and (B) the majority
of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland
China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their
usual place(s) of residence located in mainland China. In such circumstances, where a PRC domestic company is seeking an indirect overseas
offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures
with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall
submit filings with the CSRC within three business days after such application is submitted.
 


5
 

 
On February 24, 2023, the CSRC, together with
the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions issued
by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009. The revised
Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas
Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing,
as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic company that plans
to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities,
including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state
secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file
with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly or indirectly
through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies,
securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national
security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
 
On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating
Cross-border Data Flows, which stipulates that a data handler providing personal information abroad may be exempted from declaring security
assessment for data to be provided abroad, concluding a standard contract for personal information to be provided abroad or passing authentication
for protection of personal information if it satisfies certain conditions. In addition, to provide the data collected and generated in
such activities as international trade, cross-border transport, academic cooperation, transnational manufacturing and marketing, which
do not contain personal information or important data, to overseas parties is exempted from all these procedures aforementioned.
 
Except for the Basic Law, national laws of the
PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.
National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense
and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong. We are advised by our PRC counsel that,
PRC National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III of the
Basic Law and do not apply directly to our Hong Kong subsidiaries.
 
Our PRC counsel has advised us that that we are
not currently required to obtain any permission or approval from the CSRC, the CAC or any other regulatory authority in the PRC for our
operations, the trading of our securities on the OTCQB and the offering of our securities to foreign investors. The business of our subsidiary
is not subject to cybersecurity review with the CAC, given that PRC laws on data protection and cybersecurity do not currently apply
to Hong Kong. To the extent that if we become subject to such PRC laws in the future, we do not believe we are required to conduct a
cybersecurity review because (i) we do not possess a large amount of personal information in our business operations; and (ii) data processed
in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency as such PRC enforcement agency
does not currently have jurisdiction over our Hong Kong operating subsidiary. However, our operations could be adversely affected, directly
or indirectly, by existing or future laws and regulations relating to our business or industry, if we inadvertently conclude that such
approvals are not required when they are, or applicable laws, regulations, or interpretations change and we are required to obtain approval
in the future. We may be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the CSRC, if we fail to
comply with such rules and regulations, which could adversely affect the ability of the Company’s securities to continue to trade
on the OTCQB, which may cause the value of our securities to significantly decline or become worthless.
 
In addition, in light of the statements and regulatory
actions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting
foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we
may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that the PRC
government could disallow our holding company structure, which may result in a material change in our operations, including our ability
to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue
to offer securities to our investors. These adverse actions could cause the value of our securities to significantly decline or become
worthless.
 


6
 

 
Furthermore, there may be prominent risks associated
with our operations being in Hong Kong. For example, as a U.S.-listed public company operating primarily in Hong Kong, we may face heightened
scrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock.
We are also subject to certain legal and operational risks associated with our business operations in Hong Kong, which is subject to
political and economic influence from China. PRC laws and regulations are sometimes vague and uncertain, and we may face the risk that
changes in the policies of the PRC government could have a significant impact upon the business we conduct in Hong Kong and the profitability
of such business. Therefore, these risks associated with being based in or having the majority of our operations in Hong Kong could likely
cause the value of our securities to significantly decline or be worthless. Furthermore, these risks would likely result in a material
change in our business operations or a complete hinderance of our ability to offer or continue to offer our securities to investors.
 
For a detailed description of the risks facing
the Company and the risks associated with having our operations in Hong Kong, please refer to “Item 1A. Risk Factors –
Risks Related to Doing Business in Hong Kong.” 
 
Corporate History
 
QDM was incorporated in Florida on March 10,
2020 as the successor to 24/7 Kid, which was incorporated in Florida in November 1998. 24/7 Kid was a telemedicine company that provided
Connect-a-Doc telemedicine kits to schools with its services aiming at providing an alternative to schools that desire to provide a higher
level of healthcare to their students but are unable to keep a full-time school nurse available.
 
On March 3, 2020, a stock purchase agreement
(the “Purchase Agreement”) was entered into by and between Huihe Zheng, our Chief Executive Officer and Chairman, and Tim
Shannon, our then controlling shareholder as well as Chief Executive Officer, Chief Financial Officer, President and director. Pursuant
to the Purchase Agreement, Mr. Shannon sold to Mr. Zheng (i) 236,666 shares of common stock of 24/7 Kid, representing 42.6% of the total
issued and outstanding shares of common stock of 24/7 Kid as of March 9, 2020 and (ii) 13,500 shares of Series B Preferred Stock, each
entitling the holder to 100 votes on all corporate matters submitted for shareholder approval, in consideration of $500,000 in cash from
Mr. Zheng’s personal funds. The shares of common stock and Series B Preferred Stock acquired by Mr. Zheng, in the aggregate, represented
68.3% of the outstanding voting securities of 24/7 Kid as of March 9, 2020, and the acquisition of such shares resulted in a change in
control of 24/7 Kid.
 
On March 10, 2020, QDM was incorporated in Florida
as a wholly owned subsidiary of 24/7 Kid, and QDM Merger Sub, Inc. (“Merger Sub”) was incorporated in Florida as the wholly
owned subsidiary of QDM, for the purposes of effectuating a name change by implementing a reorganization of the corporate structure of
24/7 Kid through a merger (the “Merger”). On March 13, 2020, an Agreement and Plan of Merger (the “Merger Agreement”)
was entered into by and among 24/7 Kid, QDM, and the Merger Sub. On April 8, 2020, the Articles of Merger were filed with the State of
Florida to effect the Merger as stipulated by the Merger Agreement.
 
Pursuant to the Merger Agreement, Merger Sub
merged with and into 24/7 Kid, with 24/7 Kid being the surviving entity. As a result, the separate corporate existence of Merger Sub
ceased and 24/7 Kid became a direct, wholly-owned subsidiary of QDM. Pursuant to the Merger Agreement and as a result of the Merger,
all issued and outstanding shares of common stock and Series B Preferred Stock of 24/7 Kid were converted into shares of QDM’s
common stock and Series B Preferred Stock, respectively, on a one-for-one basis, with the QDM securities having the same designations,
rights, powers and preferences and the qualifications, limitations and restrictions as the corresponding share of the securities of 24/7
Kid being converted. As a result, upon consummation of the Merger, all of the shareholders of 24/7 Kid immediately prior to the Merger
became shareholders of QDM and all the directors and officers of 24/7 Kid became the directors and officers of QDM. Upon consummation
of the Merger, QDM became the successor issuer to 24/7 Kid pursuant to 12g-3(a) and as a result of shares of our common stock were deemed
to be registered under Section 12(g) of the Exchange Act.
 
On October 21, 2020, QDM entered into a share
exchange agreement (the “Share Exchange Agreement”) with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI, who is
also the principal shareholder and Chairman and Chief Executive Officer of QDM, to acquire all the issued and outstanding capital stock
of QDM BVI in exchange for the issuance to Mr. Zheng 900,000 shares of a newly designated Series C Preferred Stock, with each share of
Series C Preferred Stock being currently convertible into approximately 3.67 shares of our common stock, subject to certain adjustments
and limitations (the transaction, the “Share Exchange”). The Share Exchange closed on October 21, 2020. As a result of the
consummation of the Share Exchange, QDM acquired 100% of the share capital of QDM BVI, and indirectly all of the share capital of QDM
HK and YeeTah.
 


7
 

 
On November 3, 2021, we acquired 100% of the
issued and outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. We acquired QDMS through an intermediary
holding company, LGL, which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole shareholder
of QDMS. As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000and at the same time
the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to us for a consideration of USD$1.00. As a result, we acquired
100% ownership of LGL, which, in turn, owned 100% of QDMS.
 
In 2022, 24/7 Kid was administratively dissolved
with the State of Florida. 
 
In March 2023, the Company consummated a closing
of a public offering of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued
and sold an aggregate of 289,104,000 shares of its common stock at a price of $0.081 per share to certain investors, generating gross
proceeds to the Company of $2,339,937.
 
On October
4, 2023, the Company sold QDMS to Mr. Zheng for no consideration. As a result of the disposition, the Company recognized a gain of $33,165.  
 
Recent Developments 
 
Referral Business
 
In December 2023, we
strategically expanded our business model by entering into a collaborative partnership with a trust company in Hong Kong. This partnership
allows us to refer potential clients, who are part of our growing customer base, to the trust company for their investment products.
In return for these referrals, we receive a portion of the investment returns generated from these referred clients. This mutually beneficial
arrangement enables us to diversify our revenue streams while providing additional value to our customers by connecting them with trusted
investment opportunities. As of the date of this Report, we have not yet generated revenue from our referral business.
 
2024 Forward Stock Split
 
On March 28, 2024, the Company filed an Articles
of Amendment to Articles of Incorporation of the Company (the “Amendment”) with the Florida Department of State to (i) increase
its authorized shares of common stock, par value $0.0001 per share, from 200,000,000 shares to 700,000,000 shares and its authorized
shares of preferred stock, par value $0.0001 per share, from 5,000,000 shares to 30,000,000 shares; and (ii) effect a forward split of
its issued and outstanding shares of common stock at a ratio of 10-for-1, which became effective as of April 5, 2024. The foregoing amendments
were approved by the Company’s board of directors and shareholders holding approximately 60.9% of the voting power of the Company.
 
As a result of the 2024 Forward Stock Split,
each issued and outstanding share of the Company’s common stock prior to the effective time of the 2024 Forward Stock Spilt are
split into ten shares of common stock and the total number of issued and outstanding shares of common stock increases from 29,156,393
shares to 291,563,930 shares. The 2024 Forward Stock Split has no impact on the Company’s issued and outstanding shares of preferred
stock other than that the conversion rate and voting rights of our Series C Convertible Preferred Stock will be proportionately adjusted.
 
On April 4, 2024, the 2024 Forward Stock Split
was approved and announced by the Financial Industry Regulatory Authority with an effective date on April 5, 2024.
 
Competitive Advantages
 
We believe that the following competitive strengths
contribute to our growth and differentiate us from our competitors:
 

●Premium
                                            Customer Service Experience. We believe providing superior customer service to our
                                            existing and potential customers is the most important aspect of our business in terms of
                                            brand building and product differentiation. We have designed our services to provide personalized
                                            customer service throughout the whole insurance purchase process, including in-depth customer
                                            needs analysis, product and plan customization, product evaluation and selection, and claim
                                            settlement related assistance.

 

●Concentrated
                                            Insurance Product Offerings. Hong Kong’s independent insurance intermediary
                                            companies generally focus on both life insurance and property insurance, but our strategy
                                            has been to focus on life insurance because of generally higher commissions. As of March
                                            31, 2024, YeeTah had distributed an aggregate of 464 life and medical insurance policies
                                            from 17 insurance companies in Hong Kong. We believe our ability to offer concentrated products
                                            and services makes us an attractive distributor for our insurance company partners and enables
                                            us to provide quality service to our customers.

 


8
 

 

●Good
                                            Relationships with Insurance Companies. We maintain good relationships with the leading
                                            insurance companies in Hong Kong, which have very stringent requirements on selection of
                                            brokers. YeeTah has been working with them since 2015 and has been able to pass their annual
                                            evaluations and receive favorable commission rates.

 

●Experienced
                                            Management Team in the Insurance Industry. YeeTah’s responsible officer has
                                            more than ten years of experience serving as a senior executive in the insurance industry
                                            and is familiar with the insurance intermediary industry and the regulatory environment in
                                            Hong Kong. In addition, YeeTah’s responsible officer has more than 20 years of experience
                                            in the insurance industry and ten years of management experience.

 

●Strong
                                            Commitment to Rigorous Training and Development. Given the rapid development of new
                                            insurance products and the heavy reliance on face-to-face sales efforts in Hong Kong’s
                                            insurance industry, we believe that YeeTah’s strong in-house training program, which
                                            covers regulatory requirements, product knowledge and sales skills, gives it a competitive
                                            edge over the other professional insurance intermediaries and helps YeeTah retain its sales
                                            force and improve our sales. The training also emphasizes inculcating in YeeTah’s technical
                                            representatives our corporate culture of customer service and commitment to high ethical
                                            standards.

 
Growth Strategy 
 
Our goal is to further expand our distribution
network. To achieve this goal, we intend to capitalize on the growth potential of Hong Kong’s insurance industry and the insurance
intermediary sector, leverage our competitive strengths and pursue the following strategy:
 

●Further
                                            Participation in the Growing Life-Insurance Sector in Hong Kong. Life insurance products
                                            that require periodic premium payments have the potential to generate sustained revenue over
                                            an extended period of time. In order to take advantage of the significant growth potential
                                            of Hong Kong’s life issuance market and generate recurring income, we intend to continue
                                            to devote significant resources to growing this business line. We intend to actively recruit
                                            sales and marketing professionals to help increase sales of life insurance products in Hong
                                            Kong. We also intend to improve the productivity of individual technical representatives
                                            through rigorous training. In addition, we plan to leverage our existing customer base to
                                            cross-sell life insurance products to our non-life insurance customers.

 

●Further
                                            Expand Our Distribution Network Through Building Relationships with Strategic Partners. The
                                            insurance intermediary sector in Hong Kong is highly competitive. We plan to grow our distribution
                                            network by building relationships with partners in mainland China that have the potential
                                            of generating large premium in sales such as financial institutes, real estate companies
                                            and other public entities and with wealth management companies, high net-worth clients and
                                            strategic partners in the Hong Kong market through recruiting and hiring more sales professionals
                                            to cover strategic partners. We believe that expanding our distribution network will help
                                            us generate more business and grow our sales.

 

●Continue
                                            to Strengthen Our Relationships with Leading Insurance Companies. We currently establish
                                            and maintain most of our business relationships with insurance companies in Hong Kong. As
                                            we plan to expand our distribution network through partners in China in an effort to increase
                                            our sales volumes in the future, we hope to obtain favorable commission rates and exclusive
                                            rights to distribute high-margin products or collaborate with our insurance company partners
                                            to custom-develop products to suit the needs of our prospective customers.

 
The Hong Kong Insurance Market 
 
Hong Kong has one of the most developed insurance
markets in Asia, with the per capita insurance premium standing at high levels and has attracted many of the world’s top insurance
companies. According to the statistics published by the Hong Kong Insurance Authority, the total gross premiums of the Hong Kong insurance
industry reached HKD549 billion ($70.4 billion) for the year of 2023.
 
Total revenue premiums
of in-force long term business (referring to individual life and annuity business) in Hong Kong were HKD482.4 billion ($61.8 billion)
in 2023 (decreased by 1.8%), mainly comprising $423.4 billion of individual life and annuity business (non-linked) (increased by 2.6%),
$23.6 billion of individual life and annuity (linked) business (decreased by 16.8%), as well as $29.3 billion of retirement scheme related
business (decreased by 34.3%).
 


9
 

 
Products and Services
 
We market and sell two broad categories of insurance
products: (1) life and medical insurance products, and (2) general insurance products. As of the date of this Report, insurance products
we sell are underwritten by 17 insurance companies in Hong Kong. In addition, as an MPF Intermediary, we also assist our customers with
their investment through the MPF and the ORSO schemes in Hong Kong. Such services primarily include collection and provision of information
on investment products and exclude investment advisory services.
 
Life and Medical Insurance Products
 
Our life and medical
insurance products collectively accounted for approximately 99.90% and 99.49% of our net revenues for the fiscal year ended March 31,
2024 and 2023, respectively. For life and medical insurance products purchased by our customers, we generally receive commissions in
the range of 2.78% to 188% of the first year premiums and in the range of 0% to 64.8% of renewal premiums.
 
The sale of life and medical insurance products
is, and we currently expect it to continue to be, the major source of our revenue in the next several years. We began offering life insurance
products in 2015 with a focus on individual life products with periodic payment schedules. The major life and medical insurance products
we sell can be broadly classified into the categories set forth below. Due to constant product innovation by insurance companies, some
of the insurance products we sell combine features of one or more of the categories listed below:
 

●Individual
                                            Health Insurance. The individual health insurance products we sell primarily
                                            consist of critical illness insurance products, which provide guaranteed benefits when the
                                            insured is diagnosed with specified serious illnesses, and medical insurance products, which
                                            provide conditional reimbursement for medical expenses during the coverage period. In return,
                                            the insured makes periodic payment of premiums over a pre-determined period.

 

●Individual
                                            Annuity. The individual annuity products we sell generally provide annual benefit
                                            payments after the insured attains a certain age, or for a fixed time period, and provide
                                            a lump sum payment at the end of the coverage period. In addition, the beneficiary designated
                                            in the annuity contract will receive guaranteed benefits upon the death of the insured during
                                            the coverage period. In return, the purchaser of the annuity products makes periodic payments
                                            of premiums during a pre-determined accumulation period.

 

●Individual
                                            Endowment Life Insurance. The individual endowment products we sell generally
                                            provide insurance coverage for the insured for a specified time period and maturity benefits
                                            if the insured reaches a specified age. The individual endowment products we sell also provide
                                            to a beneficiary designated by the insured guaranteed benefits upon the death of the insured
                                            within the coverage period. In return, the insured makes periodic payment of premiums over
                                            a pre-determined period.

 
We believe due to mainland
China and Hong Kong’s rapidly aging population, high national savings rate, sustained economic development, rising household income,
strong support from government policies and regulations, and enhanced risk protection awareness, Hong Kong’s life and medical insurance
sector will experience faster growth than the other insurance sectors, and currently we continue to allocate greater resources to develop
our life and medical insurance business.
 
General Insurance Products
 
Our general insurance
products, also known as property and casualty insurance products, accounted for less than 1% of our net revenues for the fiscal year
ended March 31, 2024 and 2023. For general insurance products purchased by our customers, we generally receive commissions from the insurance
companies in the range of 8.0% - 57.5% of the premiums. The major general insurance products we offer or facilitate to individual customers
can be further classified into the following categories:
 

●Individual
                                            Accident Insurance. The individual accident insurance products we sell generally
                                            provide a guaranteed benefit during the coverage period in the event of death or disability
                                            of the insured as a result of an accident, or a reimbursement of medical expenses to the
                                            insured in connection with an accident. These products typically require only a single premium
                                            payment for each coverage period. Because most of the individual accident insurance products
                                            we sell are underwritten by general insurance companies, we classify individual accident
                                            insurance products as general insurance products.

 


10
 

 

●Travel
                                            Insurance. The travel insurance products we sell are short-term insurance
                                            providing guaranteed benefit in the event of death or disability and covering travel-related
                                            emergencies and losses, either within one’s own country, or internationally. These
                                            products typically require only a single premium payment for each coverage period.

 

●Homeowner
                                            Insurance. The homeowner insurance products we sell primarily cover damages
                                            to the insured house, along with furniture and household electrical appliance in the house
                                            caused by a number of incidents such as fire, flood and explosion.

 

●Auto
                                            Insurance. We facilitate both standard auto insurance policies and supplemental
                                            policies, which we refer to as riders. The standard auto insurance policies we facilitate
                                            generally have a term of one year and cover damages caused to the insured vehicle by collision
                                            and other traffic accidents, falling or flying objects, fire, explosion and natural disasters.
                                            We also facilitate standard third-party liability insurance policies, which cover bodily
                                            injury and property damage caused by an accident involving an insured vehicle to a person
                                            not in the insured vehicle. The riders we facilitate cover additional losses, such as liability
                                            to passengers, losses arising from vehicle theft and robbery, broken glass and vehicle body
                                            scratches.

 
MPF and ORSO Services
 
The MPF is a compulsory
saving scheme (pension fund) for the retirement of residents in Hong Kong. Most employees and their employers are required to contribute
monthly to the MPF schemes provided by approved private organizations based on the salary and period of employment of the employee. ORSO
schemes are retirement schemes set up voluntarily by employers to provide retirement benefits for their employees. MPF is the mainstream
retire plan in Hong Kong. We introduce customers to the service providers of the MPF and ORSO schemes approved by MPF as trustees to administer
the MPF and ORSO schemes. As of March 31, 2024, there were a total 12 approved trustees in Hong Kong, of which, four have signed agreements
with us in connection with its provision of MPF and ORSO related services. We assist employees who are Hong Kong residents to open personal
accounts with a new approved trustee and employers in Hong Kong to set up corporate accounts. We receive service fees in the range of
1.0% - 5.0% of the total investment transferred by an employee/employer to the new trustee and are paid by the trustee once the transaction
is completed. We had serviced five and four customers with account opening and transfer of funds through the MPF scheme during the fiscal
year ended March 31, 2024 and 2023, respectively.
 
Referral Business
 
In December 2023, we
strategically expanded our business model by entering into a collaborative partnership with a trust company in Hong Kong. This partnership
allows us to refer potential clients, who are part of our growing customer base, to the trust company for their investment products.
In return for these referrals, we receive a portion of the investment returns generated from these referred clients. This mutually beneficial
arrangement enables us to diversify our revenue streams while providing additional value to our customers by connecting them with trusted
investment opportunities. As of the date of this Report, we have not yet generated revenue from our referral business.
 
Distribution Network and Marketing
 
We rely on our technical representatives to market
and sell insurance products in Hong Kong. As of March 31, 2024, our team included 11 technical representatives who exclusively work in
insurance brokerage services for YeeTah in Hong Kong. YeeTah enters into referral agreements with business partners, pursuant to which
the business partners will refer clients to YeeTah and are compensated for their referrals if referred clients purchase insurance through
YeeTah. 
 


11
 

 
Customers
 
By providing premium customer services to our
customers, we strive to build a loyal customer base that generates referral and cross-selling opportunities, and that becomes returning
customers, who purchase more than one product from us. During the fiscal year ended March 31, 2024 and 2023, we serviced a total of 133
and 63 customers with life and medical insurance, respectively, and 33 and 23 customers with general insurance, respectively. Of all of
our customers in life and medical insurance, we had 6 from Hong Kong and 127 from mainland China for the fiscal year ended March 31, 2024
and 8 customers from Hong Kong and 55 customers from Mainland China for the fiscal year ended March 31, 2023. As of March 31, 2024, all
of our 33 customers for general insurance and five customers for MPF are from Hong Kong.
 
Collaboration with Insurance Companies
 
As of March 31, 2024, YeeTah is a party to long-term
agreements with 17 insurance companies in Hong Kong, pursuant to which YeeTah is authorized to market and distribute certain insurance
products of those companies to its customers. These agreements establish, among other things, the scope of our authority, the pricing
of the insurance products YeeTah sells and its commission rates.
 
For the fiscal years ended March 31, 2024 and 2023, our top insurance
company partners by commissions are as follows:
 


  
Fiscal Year Ended March 31, 2024  
Fiscal Year Ended March 31, 2023 

Company Name 
Commissions  (In US$)  
Percentage  of Revenue  
Commissions  (In US$)  
Percentage  of Revenue 

Company A 
 6,143,538.86  
 96.5% 
 1,032,346.56  
 91.1%

Company B 
 185,826.25  
 2.9% 
 758  
 0.1%

Company C 
 26,564.36  
 0.4% 
 90,557.84  
 8.0%

 
Competition
 
A number of industry players are involved in
the distribution of insurance products in Hong Kong. We compete for customers on the basis of our competitive product offerings, premium
customer services and reputation. Our principal competitors include:
 

●Professional
                                            insurance brokerages. As of March 31, 2024, there were a total of 1,673 and 808 insurance
                                            agencies and insurance broker companies in Hong Kong, respectively. The insurance agencies
                                            represent insurance companies, and the insurance broker companies represent customers who
                                            purchase insurance products. The rest of the insurance brokerages are other businesses which
                                            sell insurance products, such as commercial banks. With an increasing consolidation expected
                                            in the insurance brokerage sector in the coming years, we expect competition within this
                                            sector to intensify.

 

●Insurance
                                            companies. We compete against insurance companies that rely on their own sales force
                                            to distribute their products. All large insurance companies use both in-house sales force
                                            and exclusive sales agents to distribute their own products. We believe that we can compete
                                            effectively with insurance companies because we focus only on distribution and are able to
                                            offer our customers a broader range of insurance products underwritten by multiple insurance
                                            companies as well as better insurance premium.

 

●Other
                                            business entities. In Hong Kong, some business entities may distribute insurance products
                                            as an ancillary business, primarily commercial banks. However, the insurance products distributed
                                            by these entities are usually confined to those related to their main lines of business.
                                            We believe that we can compete effectively with these business entities because we offer
                                            our customers a broader variety of products and professional services.

 
Although some of our competitors have operated
for a longer period of time than us, with more market shares and greater brand influence, we believe that our team’s years of experience
in the insurance industry, as well as our quality customer service, enable us to better respond and adapt to fast changing insurance
market conditions compared to the larger competitors.
 


12
 

 
Seasonality
 
Our income is subject to quarterly fluctuations
as a result of the seasonality of our business, the timing of policy renewals and the net effect of new and lost business. For life insurance,
the insurance companies, under pressure to meet their annual sales targets, would increase their sales efforts during the fourth quarter
of a year by, for example, offering more incentives for insurance brokerages to increase sales. As a result, income derived from life
insurance products for the fourth quarter of a year is generally the highest among all four quarters. Business activities, including
buying and selling insurance, usually slow down during the Chinese New Year festivities, which occur during the first quarter of each
year. As a result, income derived from our insurance products for the first quarter of a year has generally been the lowest among all
four quarters.
 
Intellectual Property
 
As of March 31, 2024, we had no registered or registration-pending
intellectual property.
 
Employees and Technical Representatives 
 
As of March 31, 2024, we had seven employees,
including five full-time employees who are based in our headquarter in Hong Kong (three of whom are qualified technical representatives)
and our two executive officers. In addition to our employees, YeeTah is affiliated with 11 licensed technical representatives, who are
treated as independent contractors, as of March 31, 2024. Technical representatives are licensed individuals who provide advice to a policy
holder or potential policy holder on insurance matters for an insurance agent or broker, or arrange contracts of insurance in or from
Hong Kong on behalf of that insurance agent or broker. YeeTah’s affiliated technical representatives (who are not our employees)
are solely compensated via commissions on sales of insurance policies. The commissions YeeTah pays its technical representatives vary
from 100% to 170% of basic commission rate provided by each insurance company. 
 
Government Regulation 
 
As a business operating in Hong Kong, we are
subject to various regulations and rules promulgated by the Hong Kong government. The following is a brief summary of the Hong Kong laws
and regulations that currently materially affect our business. This section does not purport to be a comprehensive summary of all present
and proposed regulations and legislation relating to the industry in which we operate our business.
 
Regulations Related to Insurance Intermediaries
 
Effective September 23, 2019, the Insurance Authority
of Hong Kong (“IA”) took over the regulation of insurance agents and brokers (collectively, “Insurance Intermediaries”)
from the three self-regulatory organizations (i.e., the Insurance Agents Registration Board established under The Hong Kong Federation
of Insurers, The Hong Kong Confederation of Insurance Brokers and The Professional Insurance Brokers Association) and becomes the sole
regulator to license and supervise all Insurance Intermediaries in Hong Kong. The IA is responsible for supervising Insurance Intermediaries’
compliance with the provisions of Insurance Ordinance (Chapter 41 of the Laws of Hong Kong) (“IO”), and the relevant regulations,
rules, codes and guidelines issued by the IA. The IA is also responsible for promoting and encouraging proper standards of conduct of
Insurance Intermediaries, and has regulatory powers in relation to licensing, inspection, investigation and disciplinary sanctions.
 
The regulatory regime for Insurance Intermediaries
is activity-based. Under section 64G of the IO, a person must not carry on a regulated activity, or must not hold out that the person
is carrying on a regulated activity, in the course of business or employment, or for reward unless the person holds an appropriate type
of Insurance Intermediary license or is exempt under the IO. It is an offence for contravening section 64G of the IO.
  
Regulated Activity
 
Under section 3A(a) of the IO and Schedule 1A
to the IO, a person carries on a regulated activity if the person does any of the following:
 

●negotiating
                                            or arranging a contract of insurance;

 

●inviting
                                            or inducing, or attempting to invite or induce, a person to enter into a contract of insurance;

 


13
 

 

●inviting
                                            or inducing, or attempting to invite or induce, a person to make a decision in relation to
                                            (a) the making of an application or proposal for a contract of insurance; (b) the issuance,
                                            continuance or renewal of a contract of insurance; (c) the cancellation, termination, surrender
                                            or assignment of a contract of insurance; (d) the exercise of a right under a contract of
                                            insurance; (e) the change in any term or condition of a contract of insurance; or (f) the
                                            making or settlement of an insurance claim; or

 

●giving
                                            advice in relation to (a) the making of an application or proposal for a contract of insurance;
                                            (b) the issuance, continuance or renewal of a contract of insurance; (c) the cancellation,
                                            termination, surrender or assignment of a contract of insurance; (d) the exercise of a right
                                            under a contract of insurance; (e) the change in any term or condition of a contract of insurance;
                                            or (f) the making or settlement of an insurance claim (such advice is referred to as “Regulated
                                            Advice”).

 
Types of Licensed Insurance Brokers
 
The licensing regime under the IO prescribes
two types of licensed insurance brokers: licensed insurance broker companies and licensed technical representatives (broker).
 

●A
                                            licensed insurance broker company is a company which is granted an insurance broker company
                                            license under section 64ZA of the IO to carry on regulated activities in one or more lines
                                            of business, and to perform the act of negotiating or arranging an insurance contract as
                                            an agent of any policy holder or potential policy holder.

 

●A
                                            licensed technical representative (broker) is an individual who is granted a technical representative
                                            (broker) license under section 64ZC of the IO to carry on regulated activities in one or
                                            more lines of business, as an agent of any licensed insurance broker company.

 
A license granted under section 64ZA or 64ZC
of the IO is valid for 3 years or, if the IA considers it appropriate in a particular case, another period determined by the IA, beginning
on the date on which it is granted.
 
Responsible Officer
 
Under section 64ZF of the IO, a licensed insurance
broker company should appoint a fit and proper person to discharge his or her responsibilities as a responsible officer of the insurance
broker company, and should provide sufficient resources and support to that person for discharging his or her responsibilities. Prior
approval of the IA is required for appointment of the responsible officer.
  
“Fit and Proper” Requirements
 
Under the IO, a person who is, is applying to
be, or is applying for a renewal of a license to be, a licensed insurance broker is required to satisfy the IA that he/she/it is a fit
and proper person. In addition, the responsible officer(s), controller(s), and director(s) (where applicable) of a licensed insurance
broker company are also required to be fit and proper persons. These “fit and proper” requirements aim at ensuring that the
licensed insurance brokers are competent, reliable and financially sound, and have integrity. Pursuant to the IO, in determining whether
a person is a fit and proper person, the IA must consider, among others, the following factors:
 

●the person’s education
or other qualifications or experience;

 

●the person’s ability
to carry on a regulated activity competently, honestly and fairly;

 

●the
                                            persons’ reputation, character, reliability and integrity;

 

●the
                                            person’s financial status or solvency;

 

●whether
                                            any disciplinary action has been taken against the person by the Monetary Authority, the
                                            Securities and Futures Commission, the Mandatory Provident Fund Schemes Authority; or any
                                            other authority or regulatory organization (in Hong Kong or elsewhere) with functions similar
                                            to those of the IA;

 


14
 

 

●if
                                            the person is a company in a group of companies, any information in the possession of the
                                            IA relating to any other company in the group of companies or any controller or director
                                            of the person or of such company;

 

●the
                                            state of affairs of any other business which the person carries on or proposes to carry on;
                                            and

 

●in
                                            respect of an application to be licensed as a licensed insurance broker company or renewal
                                            of such license, any information in the possession of the IA relating to (i) any current
                                            or prospective employees or affiliates of the person, or any other person acting for or on
                                            behalf of the person, in each case, for the purposes of carrying on regulated activities
                                            and (ii) the question as to whether the person has established effective internal control
                                            procedures and risk management systems to ensure its compliance with the IO.

 
The IA also issued the Guideline on “Fit
and Proper” Criteria for Licensed Insurance Intermediaries under the Insurance Ordinance (Cap. 41) to further explain the criteria
that the IA would adopt in determining whether a person is a fit and proper person. In addition, continuing professional development
is part of the fit and proper requirement and the IA issued the Guideline on Continuing Professional Development for Licensed Insurance
Intermediaries to provide guidance for complying with the continuing professional development requirements.
 
Financial and Other Requirements for Licensed
Insurance Broker Companies
 
A licensed insurance broker company is required
to comply with the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Chapter 41L of the Laws
of Hong Kong) (“Broker Rules”), which came into force on September 23, 2019 and set out, inter alia, some of the key requirements
in relation to:
 

●Share
                                            Capital and Net Assets

 
A licensed insurance broker company must at all times maintain a paid-up
share capital of not less than HK$500,000 and net assets of not less than HK$500,000 ($64,103). In respect of licensed insurance broker
companies which were previously registered under the self-regulatory regime (and which continue to be licensed under the new regulatory
regime effective from September 23, 2019 mentioned above) (“specified insurance broker companies”), the Broker Rules stipulated
a 4-year plus phase-in transitional arrangement, pursuant to which, “specified insurance broker company” is required to maintain
the amount of paid-up share capital and net assets of (i) not less than HK $100,000 ($12,821) for the period from September 23, 2019 to
December 31, 2021 and (ii) not less than HK $300,000 ($38,462) for the period from January 1, 2022 to December 31, 2023. 
 

●Professional
                                            Indemnity Insurance

 
A licensed insurance broker company
must maintain a professional indemnity insurance policy that provides coverage for claims made against the company for liabilities arising
from breaches of duty in the course of carrying on its regulated activities.
 

●Client
                                            Accounts

 
A licensed insurance broker company
that receives or holds client monies must maintain at least one client account with an authorized institution in the name of the licensed
insurance broker company in the title of which the word “client” appears.
 

●Record
                                            Keeping

 
A licensed insurance broker company
must keep, in relation to its business which constitutes the carrying on of regulated activities, where applicable, sufficient accounting
and other records (including records relating to the assets or affairs of the company’s clients).
 
Licensed insurance broker companies are required
to file their audited financial statements and auditor’s compliance reports to the IA annually, which statements and reports are
reviewed by the IA annually. Any issue noted or qualified opinion expressed by the auditor will be followed up and where applicable,
further actions will be taken as the IA considers necessary.
 
The Broker Rules also provide certain exemptions
for the broker insurance companies subject to the transitional requirements referenced above during the specified transitional period
in complying with the requirements in relation to professional indemnity insurance, client monies reconciliation and audited financial
statements.
 


15
 

 
 

 
Conduct Requirements
 
Licensed insurance brokers are required to comply
with the statutory conduct requirements set out in sections 90 and 92 of the IO. The IA also issued the Code of Conduct for Licensed Insurance
Brokers (“Code of Conduct”) to set out the general principles, together with the standards and practices relating to each
general principle, serving as the minimum standards of professionalism to be met by licensed insurance brokers when carrying on regulated
activities.
 
The general principles that a licensed insurance
broker should comply with include:
 

●acting honestly, ethically,
with integrity and in good faith;

 

●acting in the best interests
of its clients and treating its clients fairly;

 

●acting with due care, skill
and diligence;

 

●possessing appropriate levels
of professional knowledge and experience and only carrying on regulated activities in respect of which the broker has the required competence;

 

●providing clients with accurate
and adequate information to enable them to make informed decisions;

 

●providing Regulated Advice
suitable for the client taking into account the client’s circumstances;

 

●using best endeavors to avoid
conflicts of interests and when such conflicts cannot be avoided, and managing them with appropriate disclosure to ensure clients are
treated fairly at all times; and

 

●having sufficient safeguards
in place to protect client assets received by the broker or which are in the broker’s possession.

 
A licensed insurance broker company is required
to have proper controls and procedures in place to ensure that the broker company and its licensed technical representatives (broker)
meet the general principles, standards and practices set out in the Code of Conduct.
 
The Code of Conduct does not have the force of
law, in that it is not subsidiary legislation, and should not be interpreted in a way that would override the provision of any law. A
failure by a licensed insurance broker to comply with the Code of Conduct shall not by itself render the broker liable to any judicial
or other proceedings. However, in any proceedings under the IO before a court, the Code of Conduct is admissible in evidence, and if a
provision in the Code of Conduct appears to the court to be relevant to a question arising in the proceedings, the court must, in determining
the question, take into account any compliance or non-compliance with the Code of Conduct.
 
Regulation of Mandatory Provident Fund Intermediaries
 
With the implementation of the Mandatory Provident
Fund Schemes (Amendment) Ordinance 2012, a new statutory regulatory regime for MPF intermediaries came into operation as of November 1,
2012. Under this statutory regime, only registered MPF intermediaries (such as our operating subsidiary) are allowed to engage in conducting
sales and marketing activities and giving advice in relation to MPF schemes.
 
Under the statutory regime, the Mandatory Provident
Fund Schemes Authority (“MPFA”) is the authority to administer MPF intermediaries, issue guidelines on compliance with statutory
requirements applicable to registered MPF intermediaries, and impose disciplinary sanctions. On the other hand, the IA is given the statutory
role for monitoring the compliance of the registered MPF intermediaries. As a frontline regulator, the IA supervises the conduct requirements
stipulated in the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) (“MPFSO”). If the IA has
reasonable cause to believe that the registered MPF intermediaries may have failed to comply with the statutory conduct requirements,
it may exercise the investigation powers under the MPFSO for investigating the suspected non-compliance.
 
Registered MPF intermediaries must comply with
a set of statutory conduct requirements when they engage in conducting sales and marketing activities and giving advice in relation to
MPF schemes. The MPFA has issued the Guidelines on Conduct Requirements for Registered Intermediaries to assist the registered MPF intermediaries
in understanding how to comply with the conduct requirements.
 


16
 

 
The minimum standards of conduct that a registered
MPF intermediary should adopt include:
 

●acting honestly, fairly, in
the best interests of the client and with integrity;

 

●acting with care, skill and
diligence;

 

●advising on matters within
competence;

 

●having regard to client’s
particulars as is necessary;

 

●disclosing necessary information
to the client;

 

●disclosing conflict of interest;

 

●prompt and proper accounting
for client assets;

 

●keeping records of regulated
activities;

 

●establishing, maintaining and
observing proper controls and procedures for securing compliance by the principal intermediary; and

 

●appointing a responsible officer
to use his or her best endeavors to carry out specified responsibilities in relation to the principal intermediary.

 
Regulation Related to Business Registration
 
The Business Registration Ordinance (Chapter 310
of the Laws of Hong Kong) requires every person carrying on any business in Hong Kong to make an application to the Commissioner of Inland
Revenue in the prescribed manner for the registration of that business, unless it is exempt under the Business Registration Ordinance.
The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable
after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration
certificate for the relevant business or the relevant branch, as the case may be.
 
Regulation Related to Employment and Labor
Protection 
 
Employment Ordinance (Chapter 57 of the Laws
of Hong Kong)
 
The Employment Ordinance (Chapter 57 of the Laws
of Hong Kong), or the EO, is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation
of the general conditions of employment and employment agencies. Under the EO, an employee is generally entitled to, amongst other things,
notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee;
not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays
or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment.
 
Employees’ Compensation Ordinance (Chapter
282 of the Laws of Hong Kong)
 
The Employees’ Compensation Ordinance (Chapter
282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees
injured in the course of employment. As stipulated by the ECO, no employer shall employ any employee in any employment unless there is
in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified
in the Fourth Schedule of the ECO in respect of the liability of the employer. According to the Fourth Schedule of the ECO, the insured
amount shall be not less than HK$100,000,000 (approximately $12,900,000) per event if a company has no more than 200 employees. Any employer
who contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$100,000 (approximately $12,900)
and imprisonment for two years. An employer who has taken out an insurance policy under the ECO is required to display a prescribed notice
of insurance in a conspicuous place on each of its premises where any employee is employed. Any employer who, without reasonable cause,
contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$10,000 (approximately $1,290). We
believe that we have taken sufficient employee compensation insurance for our employees required under the ECO.
 


17
 

 
Mandatory Provident Fund Schemes Ordinance
(Chapter 485 of the Laws of Hong Kong)
 
The MPFSO is an ordinance enacted for the purposes
of providing for the establishment of non-governmental mandatory provident fund schemes, or the MPF Schemes. The MPFSO requires every
employer of an employee (other than exempt persons) of 18 years of age or above but under 65 years of age to take all practical steps
to ensure the employee becomes a member of a registered MPF Scheme. Subject to the minimum and maximum relevant income levels, it is mandatory
for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. For a monthly-paid
employee, the maximum relevant income level is HK$30,000 (approximately $3,870) per month and the maximum amount of contribution payable
by the employer to the MPF Scheme is HK$1,500 (approximately $193). Any employer who, without reasonable cause, contravenes this requirement
commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $45,200) and imprisonment for three years,
and to a daily penalty of HK$500 (approximately $65) for each day on which the offence is continued. As of the date of this Report, we
believe that we have made all contributions required under the MPFSO.
 
Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong)
 
The Minimum Wage Ordinance (Chapter 608 of the
Laws of Hong Kong), or the MWO, provides for a prescribed minimum hourly wage rate (currently at HK$40.0 per hour) during the wage period
for every employee engaged under a contract of employment under the EO. Any provision of the employment contract which purports to extinguish
or reduce the right, benefit or protection conferred on the employee by the MWO is void. 
 
Regulations Related to Hong Kong Taxation
 
Inland Revenue Ordinance (Chapter 112 of the
Laws of Hong Kong)
 
Under the Inland Revenue Ordinance (Chapter 112
of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax,
or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after
the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is
or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue
not later than one month before such individual ceases to be employed in Hong Kong.
 
Tax on Dividends
 
Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by the Company.
 
Capital Gains and Profit Tax
 
No tax is imposed in Hong Kong in respect of capital
gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in
Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates
of 8.25% on assessable profits up to HK$2,000,000 (approximately US$258,000) and 16.5% on any part of assessable profits over HK$2,000,000
(approximately US$258,000) on corporations from the year of assessment of 2018/2019 onwards. Certain categories of taxpayers (for example,
financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital
gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes.
 
Stamp Duty Ordinance (Chapter 117 of the Laws
of Hong Kong)
 
Under the Stamp Duty Ordinance (Chapter 117 of
the Laws of Hong Kong), the Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the consideration
for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong
shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares). In addition,
a fixed duty of HK$5 is currently payable on any instrument of transfer of Hong Kong shares. Where one of the parties is a resident outside
Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and
will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may
be imposed.
 


18
 

 
Regulations Related to Anti-Money Laundering
and Counter-Terrorist Financing
 
Anti-Money Laundering and Counter-Terrorist
Financing Ordinance (Chapter 615 of the Laws of Hong Kong)
 
The Anti-Money Laundering and
Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong), or the AMLO imposes requirements relating to client
due diligence and record-keeping and provides regulatory authorities with the powers to supervise compliance with the requirements
under the AMLO. In addition, the regulatory authorities are empowered to (i) ensure that proper safeguards exist to prevent
contravention of specified provisions in the AMLO; and (ii) mitigate money laundering and terrorist financing risks.
 
Drug Trafficking (Recovery of Proceeds) Ordinance
(Chapter 405 of the Laws of Hong Kong)
 
The Drug Trafficking (Recovery of Proceeds) Ordinance
(Chapter 405 of the Laws of Hong Kong), or the DTROP, contains provisions for the investigation of assets suspected to be derived from
drug trafficking activities, the freezing of assets on arrest and the confiscation of the proceeds from drug trafficking activities. It
is an offence under the DTROP if a person deals with any property knowing, or having reasonable grounds to believe, it to be the proceeds
from drug trafficking. The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly
or indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure
to make such disclosure constitutes an offence under the DTROP.
 
Organized and Serious Crimes Ordinance (Chapter
455 of the Laws of Hong Kong)
 
The Organized and Serious Crimes Ordinance (Chapter
455 of the Laws of Hong Kong), or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise Department
to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the proceeds from organized
and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of specified offences. The
OSCO extends the money laundering offence to cover the proceeds of all indictable offences in addition to drug trafficking.
 
United Nations (Anti-Terrorism Measures) Ordinance
(Chapter 575 of the Laws of Hong Kong)
 
The United Nations (Anti-Terrorism Measures) Ordinance
(Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offence to: (i) provide or collect funds (by any
means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole or in part, one or more
terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly, to or for the benefit of
a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate. The UNATMO also requires a
person to report his knowledge or suspicion of terrorist property to an authorized officer, and failure to make such disclosure constitutes
an offence under the UNATMO.
 
GL3: Guideline on Anti-Money Laundering and
Counter-Terrorist Financing
 
The Guideline on Anti-Money Laundering and Counter-Terrorist
Financing is issued by the IA, and it sets out the relevant anti-money laundering and counter-financing of terrorism (AML/CFT) statutory
and regulatory requirements. It also prescribes the AML/CFT standards which authorized insurers and reinsurers carrying on long term business,
and licensed individual insurance agents, licensed insurance agencies and licensed insurance broker companies carrying on regulated activities
in respect of long term business (hereinafter referred to as “insurance institutions” (“IIs”)), should meet in
order to comply with the statutory requirements under the AMLO and the IO. Compliance with this Guideline is enforced through the AMLO
and the IO. IIs which fail to comply with this Guideline may be subject to disciplinary or other actions under the AMLO and/or the IO
for non-compliance with the relevant requirements.
 
PRC Regulations 
 
Enforceability of Civil Liabilities
 
Half of our officers and directors are residents
of China and a substantial portion of their assets are located outside the United States. As a result, it may be difficult or impossible
for a shareholder to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United
States or any state in the United States. It may also be difficult for a shareholder to enforce judgments obtained in U.S. courts based
on the civil liability provisions of the U.S. federal securities laws against us and our executive officers and directors.
 


19
 

 
Our PRC counsel has advised us that there is uncertainty
as to whether PRC courts would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers
predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii)
entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities
laws of the United States or any state in the United States.
 
Our PRC counsel has further advised us that the
PRC Civil Procedures Law governs the recognition and enforcement of foreign judgments. PRC courts may recognize and enforce foreign judgments
in accordance with the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on
principles of reciprocity between jurisdictions.
 
The PRC does not have any treaties or other agreements
with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the
PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they determine
that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain
whether a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures Law, foreign shareholders
may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have
jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case,
and there must be a concrete claim, a factual basis and a cause for the suit.
 
Item 1A. Risk Factors
 
Our business is subject to many significant risks, as more fully described
in this section entitled “Risk Factors.” If any of the risks discussed in this Report actually occur, our business, financial
condition or operating results could be materially and adversely affected. In particular, our risks include, but are not limited to, the
following:
 
Summary of Risk Factors
 
Risks Related to Our Business and Industry
 

●Our operating subsidiary derives
a significant portion of revenues from selling insurance products supplied by our major insurance company partners and our business is
subject to concentration risks arising from dependence on a single or limited number of insurance company partners.

 

●All of our sales of life and
medical insurance products and general insurance products are conducted through our licensed technical representatives. If we are unable
to attract and retain highly productive technical representatives, our business could be materially and adversely affected. Misconduct
of the technical representatives may also have a material adverse effect on our business, results of operations or financial condition.

 

●We are subject to extensive
regulations for our insurance brokerage business and operations in Hong Kong. Failure to obtain, renew, or retain licenses, permits or
approvals may affect our ability to conduct or expand our business.

 

●We face intense competition
in the insurance intermediary industry in Hong Kong. If we are unable to compete effectively with both existing and new market participants,
we may lose customers and our financial results may be negatively affected.

 

●Our commission revenue is subject
to both quarterly fluctuations as a result of the seasonality of our business, the timing of policy renewals and the net effect of new
and lost business. The factors that cause the quarterly variations are not within our control.

 

●Our disclosure controls and
procedures are not effective and we have identified material weaknesses in our internal control over financial reporting.

 


20
 

 
Risks Related to Doing Business in Hong
Kong 
 


 
●
Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in mainland China and Hong Kong, which could materially and adversely affect our business. 

 
 
 

 
●
In light of China’s extension of its authority into Hong Kong, the Chinese government can change Hong Kong’s rules and regulations at any time with little to no advance notice, and can intervene and influence our operations and business activities in Hong Kong. 

 

●We may become subject to a
variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for
improper use or appropriation of personal information provided by our customers.

 

●Trading in our securities may be prohibited under the HFCAA
if the PCAOB determines that it cannot inspect or investigate completely our auditor.

 

●QDM is a holding company with
operations conducted through its wholly-owned subsidiary based in Hong Kong. This structure presents unique risks as our investors may
never directly hold equity interests in our Hong Kong operating subsidiary, Yeetah and we will be dependent upon contributions from our
subsidiary to finance our cash flow needs.

 

●QDM is organized under the
laws of the State of Florida as a holding company that conducts its business through a number of subsidiaries organized under the laws
of foreign jurisdictions such as Hong Kong and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors
to enforce a judgment obtained in U.S. Courts against these entities, bring actions in Hong Kong against us or our management or to effect
service of process on the officers and directors managing the foreign subsidiaries.

 

●U.S. regulatory bodies may
be limited in their ability to conduct investigations or inspections if our operations are based in China.

 

●The market price for our securities
could be adversely affected by increased tensions between the United States and China.

 

●Our business, financial condition
and results of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors
may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.

 

●The enactment of the Law of
the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region could impact our Hong Kong operating subsidiary.

  
Risks Related to Our Common Stock
 


 
●
An active and visible trading market for our common stock may not develop.

 
 
 

 
●
Even if a market for our common stock develops, the market price of our common stock may be significantly volatile, which could result in substantial losses for purchasers.

 
 
 

 
●
We may not maintain qualification for OTCQB inclusion, and therefore you may be unable to sell your shares.

 
 
 

 
●
Our controlling shareholder may exercise significant influence over us and may be subject to conflicts of interest.

 
 
 

 
●
The Series B and Series C Preferred Stock, which are controlled by Mr. Huihe Zheng, our Chairman of the Board, Chief Executive Officer, have super voting rights that may adversely affect our holders of common stock; in addition, Mr. Zheng, as our controlling shareholder, may exercise significant influence over us and may be subject to conflicts of interest.

 
 
 

 
●
Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

 
 
 

 
●
Our management has determined that our disclosure controls and procedures were not effective as of March 31, 2024 and we have identified material weaknesses in our internal control over financial reporting.

 
An investment in our securities is highly speculative
and involves substantial risks, including the risks described below. You should carefully consider all of the risks described below, together
with the other information contained in this Report, before making a decision to invest in our securities. The risks highlighted here
are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial
or unlikely to occur could also impair our operations. If any of the risks or uncertainties described below or any such additional risks
and uncertainties actually occur, our business, prospects, financial condition or results of operations could be negatively affected,
and you might lose all or part of your investment.
 


21
 

 
Risks Related to Our Business and Industry
 
Our business is subject to concentration
risks arising from dependence on a single or limited number of insurance company partners.
 
We derive a significant portion of revenues from
selling insurance products supplied by our major insurance company partners. For the fiscal year ended March 31, 2024, approximately 96.5%
of our total commissions were attributed to one insurance company. For the fiscal year ended March 31, 2023, an aggregate of 99.1% of
our total commissions were attributable to our top two insurance company partners, accounting 91.1% and 8.0% of our total revenue, respectively.
 
Because of this concentration in the supply of
the insurance products we sell, our business and operations would be negatively affected if we experience a partial or complete loss of
any of these insurance partners. In addition, any significant adverse change in our relationship with any of these insurance company partners
could result in loss of revenue, increased costs and distribution delays that could harm our business and customer relationships.
 
If we fail to attract and retain productive
technical representatives to sell the insurance products, our business and operating results could be materially and adversely affected.
 
All of our sales of life and medical insurance
products and general insurance products are conducted through our licensed technical representatives. We have been actively recruiting
and will continue to recruit technical representatives to join our distribution and service network. Technical representatives have been
instrumental to the development of our life insurance business.
 
As of March 31, 2024, we had 11 technical representatives.
Competition for technical representatives is intense and there can be no assurance that we will be able to attract and retain such personnel.
If we are unable to attract and retain highly productive technical representatives, our business could be materially and adversely affected.
 
Misconduct of the technical representatives
may have a material adverse effect on our business, results of operations or financial condition.
 
Misconduct of the technical representatives could
result in regulatory sanctions, litigation or serious reputational or financial harm to us.
 
Misconduct may include:
 


 
●
the conduct during the course of sales and the use of methods of solicitation and advertising that violates the relevant laws and regulations governing insurance industry or other applicable area of laws and regulations in Hong Kong;

 
 
 

 
●
the use of methods of solicitation and advertising that are not compatible with the integrity and dignity of the profession of insurance broking;

 


 
●
the use of any illustration, circular, memorandum or other material that misrepresents or is incomplete as regards the terms, benefits or advantages of any insurance policy issued or to be issued to a prospective customer;

 


 
●
the use of any incomplete or misleading comparison or illustration of any policy or contract of insurance for the purpose of inducing an insured to forfeit or replace a policy or contract of insurance;

 


 
●
the offer of any unlawful payment, allowance or gift as an inducement to any prospective customer to insure through the technical representative; and

 


 
●
holding out to the public or advertising by means of advertisements, cards, circulars, letters, signs or other methods in an irresponsible, untruthful or otherwise unlawful manner.

 
Failure to prevent and detect misconduct may have
a material adverse effect on our business, results of operations or financial condition.
 


22
 

 
We are subject to extensive regulations
for our insurance brokerage business and operations.
 
We conduct our business primarily in Hong Kong
as a licensed insurance broker, and our business operations are subject to vigorous regulations in Hong Kong applicable to licensed insurance
brokers. Any failure to comply with applicable laws or regulations could result in fines, censure, suspensions of personnel or other sanctions,
including revocation of our license as insurance broker. Even if a sanction imposed against us or our personnel is small in monetary amount,
the adverse publicity arising from the imposition of sanctions against us by regulators could harm our reputation and impede our ability
to retain customers and develop new customer relationships, which may reduce our revenues.
 
The regulatory landscape in the insurance industry
in Hong Kong is subject to constant evolution and changes. We face the risk of significant intervention by regulatory authorities from
time to time, including increased registered capital requirements, extended training of the insurance agencies’ personnel, and adoption
of restrictive new regulations that can incur substantial costs on the Company. If any such new regulations and rules become effective
and applicable to our business, these regulations may materially limit our business activities and operational profitability.
 
Compliance with changing regulation of corporate
governance and public disclosure as a public company in the U.S., and our management’s limited experiences with such regulations,
may result in additional expenses and create an increased risk of non-compliance.
 
Changing laws, regulations and standards relating
to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty
for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.
Our management team will need to invest significant management time and financial resources to comply with both existing and evolving
standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and
attention from revenue generating activities to compliance activities. In addition, our management members who are located Hong Kong have
limited experience with compliance with U.S. laws (including securities laws). This inexperience may cause us to fall out of compliance
with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.
 
Failure to obtain, renew, or retain licenses,
permits or approvals may affect our ability to conduct or expand our business.
 
We are required to obtain applicable licenses,
permits and approvals from different Hong Kong regulatory authorities in order to conduct or expand our business. The Insurance Authority
of Hong Kong (“IA”) has promulgated various regulations on the insurance business, including regulations requiring an insurance
broker company license. We obtained, renewed and maintained our insurance broker company license as required by the IA. However, there
is no assurance that the IA will not issue new regulations governing the insurance product and service industry that might require us
to obtain additional licenses, permits or approvals for our current or future business operations. Our failure to obtain any such additional
licenses, permits or approvals may adversely affect our business operations and financial condition.
 
Competition in our industry is intense and,
if we are unable to compete effectively with both existing and new market participants, we may lose customers and our financial results
may be negatively affected.
 
The insurance intermediary industry in Hong Kong
is intensely competitive, and we expect competition to persist and further intensify as more insurance broker companies enter the market.
In insurance product distribution, we face competition from insurance companies that use their in-house sales force and exclusive sales
agents to distribute their products, from business entities that distribute insurance products on an ancillary basis, such as commercial
banks, as well as from other traditional insurance intermediaries. Many of our competitors, both existing and newly emerging, have greater
financial and marketing resources than we do and may be able to offer products and services that we do not currently offer and may not
offer in the future. If we are unable to compete effectively against those competitors, we may lose customers and our financial results
may be negatively affected.
 


23
 

 
Because the commission we earn on the sale
of insurance products is based on premiums and commission rates set by insurance companies, any decrease in these premiums or commission
rates may have an adverse effect on our results of operations.
 
We are an insurance broker and derive revenues
primarily from commissions paid by the insurance companies whose policies our customers purchase. Our commission rates are set by insurance
companies and are based on the types and terms of the insurance products. Commission rates and premiums can change based on the prevailing
economic, regulatory, tax-related and competitive factors that affect insurance companies. These factors, which are not within our control,
include the ability of insurance companies to place new business, underwriting and non-underwriting profits of insurance companies, consumer
demand for insurance products, the availability of comparable products from other insurance companies at a lower cost, as well as the
tax deductibility of commissions and the consumers themselves.
 
Because we do not determine, and cannot predict,
the timing or extent of premium or commission rate changes, we cannot predict the effect any of these changes may have on our operations.
Any decrease in premiums or commission rates may significantly affect our profitability.
 
Quarterly and annual variations in our commission
revenue may unexpectedly impact our results of operations.
 
Our commission revenue is subject to both quarterly
and annual fluctuations as a result of the seasonality of our business, the timing of policy renewals and the net effect of new and lost
business. During any given year, our commission revenue derived from distribution of life and medical insurance products is highest during
the fourth quarter and is lowest during the first quarter because it is customary for insurance companies in Hong Kong to launch promotions
in the fourth quarter in pursuit of higher sales by year end. The factors that cause the quarterly and annual variations are not within
our control. Specifically, regulatory changes to product design may result in cessation of products from time to time and cause quarterly
fluctuation in the results of our operations. In addition, consumer demand for insurance products can influence the timing of renewals,
new business and lost business, which generally includes policies that are not renewed, and cancellations, and many of our insurance products
last more than one year, contributing to the annual fluctuations in sales. As a result, quarterly or annual comparisons of our operating
results may not be used as an indication of our future performance.
 
Our future success depends on the continuing
efforts of our senior management team and other key personnel, and our business may be harmed if we lose their services.
 
Our future success depends heavily upon the continuing
services of the members of our senior management team and other key personnel, in particular, Mr. Huihe Zheng, our President and Chief
Executive Officer. If our senior executives or other key personnel are unable or unwilling to continue in their present positions, we
may not be able to replace them easily, or at all. As such, our business may be disrupted and our financial condition and results of operations
may be materially and adversely affected. Competition for senior management and key personnel in the insurance brokerage industry is intense
because of a number of factors, including the limited pool of qualified candidates. We may not be able to retain the services of our senior
executives or key personnel, or attract and retain high-quality senior executives or key personnel in the future. In addition, if any
member of our senior management team or any of our other key personnel joins a competitor or forms a competing company, we may lose customers,
sensitive trade information, key professionals and staff members.
 
We may not be able to ensure the accuracy
and completeness of product information and the effectiveness of our recommendation of insurance products.
 
Our customers rely on the insurance product information
we provide through our technical representatives. While we believe that such information is generally accurate, complete and reliable,
there can be no assurance that the accuracy, completeness or reliability of the information can be maintained in the future. If our technical
representatives provide any inaccurate or incomplete information due to either their own fault or that of our insurance partners, or we
fail to present accurate or complete information of any insurance products which could lead to our customers’ failure to get the
protection or we being warned or punished by regulatory authorities, our reputation could be harmed and we could experience reduced businesses,
which may adversely affect our business and financial performance.
 
We may not be able to recommend suitable insurance
products to our customers. Our technical representatives may not fully understand the customers’ needs and recommend suitable products
to them. In addition, because the technical representatives are compensated based on premiums and commission rates, they may be tempted
to sell insurance products with higher commissions rather than those required by or suitable to the customers or prospective customers.
If our customers are recommended insurance products that do not suit their protection needs, they may lose trust in the Company. Meanwhile,
our insurance company partners may find our recommendation ineffective. Our customers may consequently be reluctant to continue to use
our services, and our insurance company partners may be hesitant to continue to partner with us. As a result, our business, reputation,
financial performance and prospects will be materially and adversely affected.
 


24
 

 
We may face potential liability, loss of
customers and damage to our reputation for any failure to protect the confidential information of our customers.
 
Our customer database holds confidential information
concerning our customers. We may be unable to prevent third parties, such as hackers or criminal organizations, from stealing information
provided by our customers. Confidential information of our customers may also be misappropriated or inadvertently disclosed through insurance
agents’ misconduct or mistake. We may also in the future be required to disclose certain confidential information concerning our
customers to government authorities. Any compromise of our security could have a material adverse effect on our reputation, business,
prospects, financial condition and results of operations.
 
Though we have not experienced any material cybersecurity
incidents in the past, if our database was compromised by outside sources or if we were accused of failing to protect the confidential
information of our customers, we may be forced to expend significant financial and managerial resources in remedying the situation, defending
against these accusations and we may face potential liability. Any negative publicity, especially concerning breaches in our cybersecurity
systems, may adversely affect our public image and reputation. Though we take proactive measures to protect against these risks and believe
that our efforts in this area are sufficient for our business, there can be no assurance that such measures will prove effective against
all cybersecurity risks.
 
We rely on dividends and other distributions
on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries
to make payments to us could have a material adverse effect on our ability to conduct our business. 
 
QDM is a holding company incorporated in Florida,
and it relies on dividends and other distributions on equity paid by its subsidiaries for its cash and financing requirements, including
the funds necessary to pay dividends and other cash distributions to its shareholders and service any debt it may incur. If any of QDM’s
subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends
or make other distributions to QDM.
 
Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by our Hong Kong subsidiaries to us. See “Item
1. Business – Regulation — Regulations Related to Hong Kong Taxation.” Any limitation on the ability of our Hong
Kong subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments
or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
 
Risks Related to Doing Business in Hong Kong
 
Political risks associated with conducting
business in Hong Kong and economic instability in Hong Kong may adversely impact our results of operations. We may also face the risk
that changes in the policies of the PRC government could have a significant impact upon the business we conduct in Hong Kong and the profitability
of such business.
 
Our operational activities are primarily conducted
in Hong Kong. Accordingly, political and economic conditions in Hong Kong and the surrounding region may directly affect our business.
Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic
Law, namely, the constitutional document for Hong Kong, which provides Hong Kong with a high degree of autonomy and executive, legislative
and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. However,
there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future.
Since all of our operations are primarily based in Hong Kong, any change of such political arrangements may pose an immediate threat to
the stability of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial positions.
 
 
Our revenue is susceptible to ongoing incidents
or factors which affect the stability of the social, economic and political conditions in Hong Kong. Any drastic events may adversely
affect the business operations of our Hong Kong operating subsidiary. Such adverse events may include changes in economic conditions and
regulatory environment, social and/or political conditions, civil disturbance or disobedience, as well as significant natural disasters.
Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on the business operations
of our Hong Kong operating subsidiary, which could in turn adversely and materially affect our business, our results of operations and
financial condition. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty
for affected issuers, including us, and the market price of our Ordinary Shares could be adversely affected.
 


25
 

 
In addition, economic, political and legal developments
and social conditions in the PRC may significantly affect our business, financial condition, results of operations and prospects. The
PRC economy is in transition from a planned economy to a market-oriented economy subject to plans adopted by the government that set national
economic development goals. Policies of the PRC government can have significant effects on economic conditions in the PRC and Hong Kong.
While we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and that business
development in the PRC will continue to follow market forces, we cannot assure you that this will be the case. Our business operations
and prospects, financial condition, and results of operations may be adversely affected by changes in policies by the PRC government,
including:
 


 
●
changes in laws, regulations or their interpretation;

 
 
 

 
●
confiscatory taxation;

 
 
 

 
●
restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise;

 
 
 

 
●
expropriation or nationalization of private enterprises; and

 
 
 

 
●
the allocation of resources.

 
Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
upon the business that we conduct in Hong Kong and accordingly on the results of our operations and financial condition.
 
Our business operations may be adversely affected
by the current and future political environment in the PRC. The PRC government has exercised and continues to exercise substantial control
over virtually every sector of the Chinese economy through regulation and state ownership. The interpretations of many laws, regulations
and rules may not always be uniform and the enforcement of these laws, regulations and rules may involve uncertainties for you and us.
Our ability to operate in Hong Kong, conduct overseas offerings and continue to investment in Hong Kong based issuers may be harmed by
these changes in its laws and regulations, including those relating to taxation, import and export tariffs, healthcare regulations, environmental
regulations, land use and property ownership rights, and other matters. Accordingly, government actions in the future, including any decision
not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in
the implementation of economic policies, could have a significant effect on economic conditions in Hong Kong or particular regions thereof,
and could limit or completely hinder our ability to offer or continue to offer securities to investors or require us to divest ourselves
of any interest we then hold in Hong Kong properties or joint ventures. Any such actions (including divesture or similar actions) could
result in a material adverse effect on us and on your investment in us and could render our securities and your investment in our securities
worthless.
 
There are substantial uncertainties regarding
the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our
business, or the enforcement and performance of our contractual arrangements in the event of the imposition of statutory
liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate a comprehensive system
of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance,
commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing,
China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects
of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published
cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.
New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have
been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society
and economy in China. Because government agencies and courts that provide interpretations of laws and regulations and decide contractual
disputes and issues may change their interpretation or enforcement very rapidly with little advance notice at any time, we cannot predict
the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness
on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as
well as may cause possible problems to foreign investors.
 
Although the PRC government has been
pursuing economic reform policies for more than two decades, the PRC government continues to exercise significant control over
economic growth in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy
and imposing policies that impact particular industries in different ways. For example, according to the Circular on Further
Promoting the Facilitation of Individual Current Account Foreign Exchange Business and its annexes issued and implemented by the
State Administration of Foreign Exchange on March 25, 2021, the purchase of foreign exchange by individuals of mainland China shall
not be used to purchase overseas life insurance or investment dividend-returning insurance. We cannot assure you that the PRC
government will continue to pursue policies favoring a market-oriented economy or that existing policies will not be significantly
altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting
political, economic and social life in the PRC.
 


26
 

 
The enactment of the Law of the PRC on
Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could
impact our Hong Kong operating subsidiary.
 
On June 30, 2020, the Standing Committee of the
PRC National People’s Congress passed the Hong Kong National Security Law. Hong Kong’s chief executive promulgated it in Hong
Kong later the same day. This law defines the duties and government bodies of the Hong Kong for safeguarding national security and four
categories of offences — secession, subversion, terrorist activities, and collusion with a foreign country or external elements
to endanger national security — and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump signed
the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and
entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. The HKAA further authorizes secondary
sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant
transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect the foreign financial
institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult
to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong
Kong operating subsidiary is determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities,
the business operations, our financial position and results of operations could be materially and adversely affected.
 
Our business operations are located in Hong
Kong, which renders us especially sensitive to local conditions and changes, such as those with respect to laws and regulations, economic
and political environments, force majeure events, natural disasters or mass civil movements.
 
Currently, our business operations are based in
Hong Kong, and we have no plan to operate in other territories in the near future. Our business operations are therefore exposed to any
deterioration in the economic, social and/or political conditions, significant changes in laws and regulations governing the insurance
brokerage services industry, as well as any change of legal system, incidence of social movements, strike, riot, civil disturbances, mass
civil movements, disobedience, recurrence of past outbreaks or epidemics, occurrence of any future epidemic outbreaks, natural disasters
or other catastrophic events in Hong Kong. Since our business operations are limited to Hong Kong, the aforesaid adverse circumstances
may materially and adversely disrupt operations of our insurance brokerage services, and in turn, our revenues and profitability, and
consequently, our results of operations and financial condition.
 
Our Hong Kong subsidiaries may be subject
to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements,
conduct business and pay dividends to holders of our common stock. Dividends payable to our foreign investors and gains on the sale of
our shares of common stock by our foreign investors may become subject to tax by the PRC.
 
QDM is a holding company incorporated in Florida
with its operating subsidiary located in Hong Kong. Accordingly, most of our cash is maintained in Hong Kong Dollars. We conduct no other
business and, as a result, we depend entirely upon our Hong Kong operating subsidiary’s earnings and cash flow. If we decide in
the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of
dividends or other payments from our Hong Kong operating subsidiary. There are currently no restrictions of transferring funds between
our Florida holding company and our operating subsidiary in Hong Kong or limitations on the ability of our Hong Kong subsidiaries to issue
dividends or other distributions to its overseas shareholders. However, we cannot assure you that
the oversight of the PRC government will not be extended to companies operating in Hong Kong like our Hong Kong operating subsidiary.
There is a possibility that the PRC government could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict
the deployment of the cash into our business or for the payment of dividends. Any such controls or restrictions may adversely affect our
ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders and could
result in a material adverse change to our business operations, our prospects, financial condition, and results of operations, and could
cause our common stock to significantly decline in value or become worthless. 
 


27
 

 
The market price for our securities could
be adversely affected by increased tensions between the United States and China.
 
Recently there have been heightened tensions in
the economic and political relations between the United States and China. On June 30, 2020, the Standing Committee of the PRC National
People’s Congress issued the Hong Kong National Security Law. This law defines the duties and government bodies of Hong Kong for
safeguarding national security and four categories of offences—secession, subversion, terrorist activities and collusion with a
foreign country or external elements to endanger national security—and their corresponding penalties. On July 14, 2020, former U.S.
President Donald Trump signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions
against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August
7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including then Hong Kong chief executive Carrie
Lam. On October 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying
persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or
the Basic Law”. On March 16, 2021, the U.S. State Department submitted a report listing an additional 24 foreign persons determined
to meet the HKAA criteria. This report is an update to the October 2020 and March 2021 reports, consistent with section 5(e) of the HKAA.
In July 2021, President Joe Biden warned investors about the risks of doing business in Hong Kong and on July 16, 2021, the U.S. Departments
of State, Commerce, Homeland Security and the Treasury issued an advisory saying China’s push to exert more control over Hong Kong
threatens the rule of law and endangers employees and data. The HKAA further authorizes secondary sanctions, including the imposition
of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned
under this authority. The imposition of sanctions such as those provided in the HKAA is in practice discretionary and highly political,
especially in a relationship as extensive and complex as that between the United States and China. It is difficult to predict the full
impact of the HKAA on Hong Kong and companies like us. Furthermore, legislative or administrative actions in respect of Sino-U.S. relations
could cause investor uncertainty for affected issuers, including us, and the market price of our securities could be adversely affected.
 
We may be affected by the currency peg system
in Hong Kong.
 
Since 1983, Hong Kong dollars have been pegged
to the U.S. dollars at the rate of approximately HK$7.80 to US$1.00. We cannot assure you that this policy will not be changed in the
future. If the pegging system collapses and Hong Kong dollars suffer devaluation, the Hong Kong dollar cost of our expenditures denominated
in foreign currency may increase. This would in turn adversely affect the operations and profitability of our business.
 
Our business, financial condition and results
of operations, and/or the value of our common stock or our ability to offer or continue to offer securities to investors may be materially
and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.
 
We currently have no operations in mainland China.
YeeTah does not sell any insurance products in mainland China or solicit customers or collect, store or process any personal data of any
customer in China, and is not regulated by any insurance regulator in mainland China. As a result, the laws and regulations of the PRC
do not currently have any material impact on YeeTah’s business, financial condition and results of operations. However, as we operate
in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future laws of the PRC become
applicable to a company such as us, it will not have a material adverse impact on our business, financial condition and results of operations
and/or our ability to offer or continue to offer securities to investors, any of which may cause the value of such securities to significantly
decline or be worthless.
  
Except for the Basic Law, national laws of the
PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.
National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense
and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong. National laws and regulations relating to
data protection, cybersecurity and the anti-monopoly have not been listed in Annex III and do not apply directly to Hong Kong.
 


28
 

 
The laws and regulations in the PRC are evolving,
and their enactment timetable, interpretation and implementation involve significant uncertainties. To the extent any PRC laws and regulations
become applicable to us, we may be subject to the risks and uncertainties associated with the legal system in the PRC, including with
respect to the enforcement of laws and the possibility of changes of rules and regulations with little or no advance notice.
 
We may also become subject to the laws and regulations
of the PRC to the extent we commence business and customer facing operations in mainland China as a result of any future acquisition,
expansion or organic growth.
 
The PRC government exerts substantial influence
and discretion over the manner in which companies incorporated under the laws of PRC must conduct their business activities. We are a
Hong Kong-based company with no substantive operations in mainland China. However, if we were to become subject to such direct influence
or discretion, it may result in a material change in our operations and/or the value of our common stock, which would materially affect
the interest of the investors.
 
We have no operation in mainland China. We primarily
operate in Hong Kong, a special administrative region of China. In addition, YeeTah does not sell any insurance products in mainland China
or solicit any customer in China, and is not regulated by any insurance regulator in mainland China. The PRC government currently does
not exert direct influence and discretion over the manner in which we conduct our business activities outside of mainland China, however,
there is no guarantee that we will not be subject to such direct influence or discretion in the future due to changes in laws or other
unforeseeable reasons or as a result of our expansion or acquisition of operations in mainland China.
 
The PRC legal system is evolving rapidly and the
PRC laws, regulations, and rules may change quickly with little advance notice. In particular, because these laws, rules and regulations
are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, the interpretation
of these laws, rules and regulations may contain inconsistences, the enforcement of which involves uncertainties. The PRC government has
exercised and continues to exercise substantial control over many sectors of the PRC economy through regulation and/or state ownership.
Government actions have had, and may continue to have, a significant effect on economic conditions in the PRC and businesses which are
subject to such government actions.
 
If we were to become subject to the direct intervention
or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as a result of our development,
expansion or acquisition of operations in the PRC, it may require a material change in our operations and/or result in increased costs
necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. In addition, the market
prices of our common stock could be adversely affected as a result of anticipated negative impacts of any such government actions, as
well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC government oversight and regulation, regardless
of our actual operating performance. There can be no assurance that the Chinese government would not intervene in or influence our operations
at any time.
 
In the opinion of our PRC counsel, we are not
currently required to obtain permission from the PRC government for the trading of our common stock on the OTCQB; however, there is no
guarantee that this will continue to be the case in the future, or even when such permission is obtained, it will not be subsequently
denied or rescinded. Any actions by the PRC government to exert more oversight and control over offerings (including businesses whose
primary operations are in Hong Kong) that are conducted overseas and/or foreign investments in Hong Kong-based issuers could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to
significantly decline or be worthless.
 
We are aware that the PRC government initiated
a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking
down on illegal activities in the securities market, enhancing supervision over mainland China-based companies listed overseas using variable
interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly
enforcement. Our PRC counsel has advised us that we are not subject to cybersecurity review with the CAC, given that: (i) we do not possess
a large amount of personal information in our business operations; and (ii) data processed in our business does not have a bearing on
national security and thus may not be classified as core or important data by the authorities. In addition, our PRC counsel has advised
us that we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues
which provided from us and audited by our auditor, and the fact that we currently do not expect to propose or implement any acquisition
of control of, or decisive influence over, any company with revenues within China of more than RMB800 million. Currently, these statements
and regulatory actions have had no impact on our daily business operation, the ability to accept foreign investments and list our securities
on an U.S. or other foreign exchange. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative
or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations
will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business
operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. See “Item
1. Business – Regulatory Permissions and Developments” on page 4.
 


29
 

 
Under the HFCAA, our securities may be prohibited
from being traded on any U.S. securities exchange, including the New York Stock Exchange and Nasdaq, or through any other trading method
within the SEC’s regulatory jurisdiction, including the OTC markets if our auditor is not inspected by the PCAOB for three consecutive
years, and this ultimately could result in trading in our securities being prohibited. Furthermore, on June 22, 2021, the U.S. Senate
passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and require the SEC to prohibit
an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor is not subject to PCAOB inspections
for two consecutive years instead of three. 
 
As part of a continued regulatory focus in the
United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019,
a bipartisan group of lawmakers introduced bills in both houses of Congress that would require the SEC to maintain a list of issuers for
which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. The Ensuring Quality
Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for
such issuers and, beginning in 2025, the delisting from national securities exchanges of issuers included for three consecutive years
on the SEC’s list. On May 20, 2020, the U.S. Senate passed S. 945, the HFCAA. The HFCAA was approved by the U.S. House of Representatives
on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCAA. In essence, the HFCAA requires the SEC
to prohibit foreign companies from listing securities on U.S. securities exchanges or trading through any other trading method within
the SEC’s regulatory jurisdiction, including trading on the OTC markets, if a company retains a foreign accounting firm that cannot
be inspected by the PCAOB for three consecutive years, beginning in 2021. The enactment of the HFCAA and any additional rulemaking efforts
to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market
price of our securities could be adversely affected, and our securities could be prohibited from being traded on any U.S. national securities
exchange, or through any other trading method within the SEC’s regulatory jurisdiction, including the OTC markets if it is unable
to cure the situation to meet the PCAOB inspection requirement in time. On March 24, 2021, the SEC adopted interim final rules relating
to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply with these rules
if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The
SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described
above. If we fail to meet the new rules before the deadline specified thereunder, we could face possible prohibition from trading on the
OTCQB, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively terminate, our securities
trading in the United States. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure
requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report
issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate
completely because of a position taken by an authority in foreign jurisdictions.
 
Furthermore, on June 22, 2021, the U.S. Senate
passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and require the SEC to prohibit
an issuer’s securities from trading on any U.S. stock exchanges or the OTC markets if its auditor is not subject to PCAOB inspections
for two consecutive years instead of three. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides
a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate
completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities
in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements
in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a
registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely
because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which
found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (i) China, and
(ii) Hong Kong. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate
completely registered public accounting firms headquartered in: (i) China, and (ii) Hong Kong. On August 26, 2022, the PCAOB signed a
Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China,
taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered
in mainland China and Hong Kong completely, consistent with U.S law. It includes three provisions that, if abided by, would grant the
PCAOB complete access for the first time: (1) the PCAOB has sole discretion to select the firms, audit engagements and potential violations
it inspects and investigates – without consultation with, nor input from, Chinese authorities; (2) procedures are in place for PCAOB
inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information
as needed; and (3) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB
inspects or investigates. On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms
in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB
could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. However, if in the
future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in
mainland China and Hong Kong, then the companies audited by those registered public accounting firms could be subject to a trading prohibition
on U.S. markets pursuant to the HFCAA.
 


30
 

 
The audit report included in this Report was issued
by ZH CPA, LLC, a U.S. based accounting firm that is registered with the PCAOB and can be inspected by the PCAOB. We have no intention
of dismissing ZH CPA, LLC in the future or engaging any auditor not based in the U.S. and not subject to regular inspection by the PCAOB.
There is no guarantee, however, that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the
entire term of our engagement. The PCAOB is currently unable to conduct inspections in China or Hong Kong without the approval of relevant
government authorities. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investor
may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB,
or a lack of PCAOB inspections of audit work undertaken in China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’
audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate
and accurate. Furthermore, if the PCAOB is unable to inspect or investigate completely our auditor, it could result in the prohibition
of trading in our securities by not being allowed to list on a U.S. exchange, and as a result an exchange may determine to delist our
securities, which would materially affect the interest of our investors.
 
If we become directly subject to the recent
scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate
and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our
shares, especially if such matter cannot be addressed and resolved favorably.
 
U.S. public companies that have substantially
all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators
and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting
irregularities, a lack of effective internal controls over financial accounting and reporting, inadequate corporate governance policies
or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity,
the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually
worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and
external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity
will have on our company and our business. If we become the subject of any unfavorable allegations, whether such allegations are proven
to be true or untrue, we may have to expend significant resources to investigate such allegations and/or defend the Company. This situation
may be a major distraction to our management. If such allegations are not proven to be groundless, our Company and business operations
will be severely hampered and your investment in our stock could be rendered worthless. In addition, major issues with other U.S. listed
Chinese companies in the future, could have a negative effect on the value of your investment, even though the Company is not involved.
 
Because substantially all of our operations are
based in Hong Kong, we are subject to the regulations and rules of the Hong Kong government as well as the influence of the Chinese government.
The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy
through regulation and state ownership. Our ability to operate in Hong Kong may be harmed by changes in its laws and regulations, including
those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of
these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures
and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future,
including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional
or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular
regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
 
As such, the Company’s business segments
may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject
to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.
The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure
to comply. The Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations
relating to its business or industry. Given that the Chinese government may intervene or influence our operations at any time with little
to no advanced notice, it could result in a material change in our operation and the value of our common stock. Given recent statements
by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas, any such
action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the
value of such securities to significantly decline or be worthless.
 
Furthermore, it is uncertain when and whether
the Company will be required to obtain permission from the PRC government for our current quotation on the OTCQB or any future application
to have our securities list on a U.S. stock exchange, and even when such permission is obtained, whether it will be denied or rescinded.
Although the Company is currently not required to obtain permission from any PRC regulatory authorities and has not received any denial
to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations
relating to its business or industry. As a result, our common stock may decline in value dramatically or even become worthless should
we become subject to new requirement to obtain permission from the PRC government to list on U.S. exchange in the future.
 


31
 

 
The General Office of the Central Committee of
the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on
Illegal Securities Activities, which were available to the public on July 6, 2021. These opinions emphasized the need to strengthen the
administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed
to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing
China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. Moreover, the State Internet Information
Office issued the Measures of Cybersecurity Review (Revised Draft for Comments, not yet effective) on July 10, 2021, which require operators
with personal information of more than 1 million users who want to list abroad to file a cybersecurity review with the Office of Cybersecurity
Review. On December 28, 2021, the Cyberspace Administration of China (the “CAC”) jointly with the relevant authorities formally
published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, replacing the former Measures for Cybersecurity
Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure
purchasing network products and services, and online platform operators (together with the operators of critical information infrastructure,
the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity
review, and any online platform operator who controls more than one million users’ personal information must undergo a cybersecurity.
On July 7, 2022, the CAC issued the Measures for the Security Assessment of Cross-border Transfer of Data, which stipulates that
data processor who provides overseas the important data collected and generated during operations within the PRC and personal information
that shall be subject to security assessment shall conduct a security assessment. Furthermore, if the data processor provides data overseas
and meets one of the following circumstances, it shall declare the security assessment: (i) where a data processor provides critical
data abroad; (ii) where a key information infrastructure operator or a data processor processing the personal information of more
than one million people provides personal information abroad; (iii) where a data processor has provided personal information of
100,000 people or sensitive personal information of 10,000 people in total abroad since January 1 of the previous year; and (iv) other
circumstances prescribed by the CAC for which declaration for security assessment for outbound data transfers is required. On February
17, 2023, with the approval of the State Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering
and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant
to the Trial Measures, (i) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete
filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission
of initial public offerings or listing applications. If a domestic company fails to complete the required filing procedures or conceals
any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties,
such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge
and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets
both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering
and listing by a PRC domestic company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or
net assets as documented in its audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic
companies; and (B) the majority of the issuer’s business activities are carried out in mainland China, or its main place(s) of
business are located in mainland China, or the majority of its senior management team in charge of its business operations and management
are PRC citizens or have their usual place(s) of residence located in mainland China. In such circumstances, where a PRC domestic company
is seeking an indirect overseas offering and listing in an overseas market, the issuer shall designate a major domestic operating entity
responsible for all filing procedures with the CSRC, and where an issuer makes an application for an initial public offering or listing
in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.
On February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration
of China, revised the Provisions issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration
of China in 2009. The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives
Administration of Overseas Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together
with the Trial Measures. One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas
offering and listing, as is consistent with the Trial Measures. The revised Provisions require that, among other things, (a) a domestic
company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals
or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that
contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to
law, and file with the secrecy administrative department at the same level; and (b) a domestic company that plans to, either directly
or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities
companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental
to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As
of the date of this Report, the revised Provisions have come into effect. Any failure or perceived failure by our Company or our subsidiaries
to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and
regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ
to be investigated for criminal liability if suspected of committing a crime.On March 22, 2024, the CAC issued the Provisions on Promoting
and Regulating Cross-border Data Flows, which stipulates that a data handler providing personal information abroad may be exempted from
declaring security assessment for data to be provided abroad, concluding a standard contract for personal information to be provided
abroad or passing authentication for protection of personal information if it satisfies certain conditions. In addition, to provide the
data collected and generated in such activities as international trade, cross-border transport, academic cooperation, transnational manufacturing
and marketing, which do not contain personal information or important data, to overseas parties is exempted from all these procedures
aforementioned.
 


32
 

 
The aforementioned policies and any related implementation
rules to be enacted may subject us to additional compliance requirement in the future. While we believe that our operations are not affected
by this, as these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects
at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions
or any future implementation rules on a timely basis, or at all.
 
It may be difficult for shareholders to
enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our shareholders.
 
Substantially all of our assets are located in
Hong Kong. Moreover, half of our current directors and officers are Chinese nationals. All or a substantial portion of their assets are
located outside the United States. As a result, it may be difficult for our shareholders to effect service of process within the United
States upon our subsidiaries or any individuals. In addition, there is uncertainty as to whether the courts of Hong Kong or the PRC would
recognize or enforce judgments of U.S. courts obtained against us or our officers and/or directors predicated upon the civil liability
provisions of Hong Kong against us or such persons predicated upon the securities laws of the United States or any state thereof. It is
unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our
officers and directors of criminal penalties under the United States Federal securities laws or otherwise.
 
In addition, the recognition and enforcement of
foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance
with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made
or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the
United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil
Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment
violates the basic principles of PRC laws or national sovereignty, security, or public interest. As a result, it is uncertain whether
and on what basis a PRC court would enforce a judgment rendered by a court in the United States.
 
It may also be difficult for you or overseas regulators
to conduct investigations or collect evidence within China. For example, in China, there are significant legal and other obstacles to
obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities.
Although the authorities in China may establish a regulatory cooperation mechanism with its counterparts of another country or region
to monitor and oversee cross-border securities activities, such regulatory cooperation with the securities regulatory authorities in the
United States may not be efficient in the absence of a practical cooperation mechanism. Furthermore, according to Article 177 of the PRC
Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is allowed to directly
conduct investigations or evidence collection activities within the territory of the PRC. Article 177 further provides that Chinese entities
and individuals are not allowed to provide documents or materials related to securities business activities to foreign agencies without
prior consent from the securities regulatory authority of the State Council and the competent departments of the State Council. While
detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities
regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by
you in protecting your interests.
 
U.S. regulatory bodies may be limited in
their ability to conduct investigations or inspections if our operations are based in China.
 
Any disclosure of documents or information located
in China by foreign agencies may be subject to jurisdiction constraints and must comply with China’s state secrecy laws, which broadly
define the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee
that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities
who provide services to us or with whom we associate, without violating PRC legal requirements, especially as those entities are located
in China. Furthermore, under the current PRC laws, any on-site inspection by any of these regulators may be limited or prohibited.
 


33
 

 
Risks Related to Our Common Stock
 
An active and visible trading market for
our common stock may not develop.
 
Although our common stock is quoted on the OTCQB,
trading has been very limited and we cannot predict whether an active market for our common stock will develop in the future. We are not
applying for the listing of our common stock on a national exchange. In the absence of an active trading market:
 

●investors may have difficulty
buying and selling or obtaining market quotations;

 

●market visibility for shares
of our common stock may be limited; and

 

●a lack of visibility for shares
of our common stock may have a depressive effect on the market price for shares of our common stock.

 
The OTCQB is an unorganized, inter-dealer, over-the-counter
market that provides significantly less liquidity than Nasdaq Stock Market or the New York Stock Exchange. The trading price of the common
stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts’
earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and
other factors. These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market
price of our common stock.
 
Even if a market for our common stock develops,
the market price of our common stock may be significantly volatile, which could result in substantial losses for purchasers.
 
The market price for our common stock may be significantly
volatile and subject to wide fluctuations in response to factors including the following:
 

●actual or anticipated fluctuations
in our quarterly or annual operating results;

 

●changes in financial or operational
estimates or projections;

 

●conditions in markets generally;

 

●changes in the economic performance
or market valuations of companies similar to ours; and

 

●general economic or political
conditions in the United States or elsewhere.

 
In some cases, following periods of volatility
in the market price of a company’s securities, shareholders have often instituted class action securities litigation against those
companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which
could significantly harm our business operations and reputation.
 


34
 

 
 

 
We may not maintain
the qualification for OTCQB inclusion, and therefore you may be unable to sell your shares.
 
Our common stock is eligible
for quotation on the OTCQB. However, trading of our common stock could be suspended. If for any reason our common stock does not become
eligible or maintain eligibility for quotation on the OTCQB or a public trading market does not develop, purchasers of shares of our common
stock may have difficulty selling their shares should they desire to do so. If we are unable to satisfy the requirements for quotation
on the OTCQB, any quotation in our common stock could be conducted in the “pink sheets” market. As a result, a purchaser of
our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares. This would
materially and adversely affect the liquidity of our securities.
 
Our controlling shareholder may
exercise significant influence over us and may be subject to conflicts of interest.
 
Our Chairman of the Board, Chief Executive Officer
and President, Huihe Zheng, owns approximately 42.4% of our outstanding voting power. Mr. Zheng thus has the power, on his own, to determine
the outcome of any corporate transaction or other matters submitted to our shareholders for approval, including mergers, consolidations
and the sale of all or substantially all of our assets, election of directors, approval of equity incentive plans, and other significant
corporate actions. Mr. Zheng also has the power to prevent or cause a change in control. In addition, without the consent of Mr. Zheng,
we could be prevented from entering into transactions that could be beneficial to us. The interests of Mr. Zheng may differ from the interests
of our other shareholders, which cause him to be faced with conflicts of interests that may not be resolved in favor of or to the satisfaction
of our minority shareholders. 
 
The Series B Preferred Stock, which are
controlled by our Chairman of the Board, Chief Executive Officer, have super voting rights that may adversely affect our holders of common
stock.
 
Except as required by law, holders of Series B
Preferred Stock (which is currently controlled by Huihe Zheng, our Chairman of the Board, Chief Executive Officer) are entitled to super
voting rights. Each share of Series B Preferred Stock is entitled to 100 votes. Holders of Series B Preferred Stock will vote on all matters
upon which common stock holders are entitled to vote. The voting rights of holders of our common stock will be diluted as a result of
these super voting rights.
 
Our common stock may be considered a “penny
stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell. 
 
Our common stock, which is currently quoted on
OTCQB, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny
stock” under Section 3a51-1 of the Exchange Act, as amended. Our common stock may be a “penny stock” if it meets one
or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a “recognized”
national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv)
is issued by a company that has been in business less than three years with net tangible assets less than $5 million. The principal result
or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock
will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act.
For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the
risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting
any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the
broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions;
(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii)
above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s
financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and
time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or
otherwise.
 


35
 

 
FINRA sales practice requirements may also
limit your ability to buy and sell our common stock, which could depress the price of our shares. 
 
FINRA rules require broker-dealers to have reasonable
grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending
speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information
about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these
rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers.
Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit
your ability to buy and sell our shares, have an adverse effect on the market for our shares, and thereby depress our share price.
 
You may face significant restrictions on
the resale of your shares due to state “blue sky” laws. 
 
Each state has its own securities laws, often
called “blue sky” laws, which (1) limit sales of securities to a state’s residents unless the securities are registered
in that state or qualify for an exemption from registration, and (2) govern the reporting requirements for broker-dealers doing business
directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction,
or it must be exempt from registration. The applicable broker-dealer must also be registered in that state.
 
We do not know whether our securities will be
registered or exempt from registration under the laws of any state. A determination regarding registration will be made by those broker-dealers,
if any, who agree to serve as market makers for our common stock. We have not yet applied to have our securities registered in any state
and will not do so until we receive expressions of interest from investors resident in specific states after they have viewed this Report.
There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities.
You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your shares without
the significant expense of state registration or qualification.
 
Our management has determined that our disclosure
controls and procedures are not effective and we have identified material weaknesses in our internal control over financial reporting.

 
In connection with the preparation of our financial
statements for the fiscal years ended March 31, 2024 and 2023, our management concluded that our internal control over financial reporting
was not effective and we identified several material weaknesses. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis. In addition, as of March 31, 2024, our management concluded
that our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting.
The material weaknesses result from the following: (i) lack of proper segregation of duties and risk assessment process; (ii) lack of
formal documentation in internal controls over financial reporting; and (iii) lack of independent directors and an audit committee.
 
Each of the material weaknesses described above
could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim consolidated
financial statements that would not be prevented or detected. We cannot assure you that any measures we may take in the future will be
sufficient to remediate the material weaknesses described above or avoid potential future material weaknesses. If we are unable to report
financial information timely and accurately or to maintain effective disclosure controls and procedures, our stock price could be negatively
impacted and we could be subject to, among other things, regulatory or enforcement actions by the SEC.
 
If securities or industry analysts do not
publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price
and trading volume could decline.
 
The trading market for our common stock will be
influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have
and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the trading price
of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more of the analysts who cover us downgrade our stock,
our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us,
we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
 


36
 

 
We do not foresee paying cash dividends
in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if
any. 
 
We do not plan to declare or pay any cash dividends
on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result,
investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation,
if any, of our shares may be investors’ sole source of gain for the foreseeable future. Moreover, investors may not be able to resell
their common stock at or above the price they paid for them.
 
The rights of the holders of common stock
may be impaired by the potential issuance of preferred stock. 
 
Our Board of Directors may, without shareholder
approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights that could adversely affect the voting
power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right to more than one vote
per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The possible impact on takeover
attempts could adversely affect the price of our common stock. Although we have no present intention to issue any additional shares of
preferred stock or to create any new series of preferred stock, we may issue such shares in the future.
 
You may experience additional dilution as
a result of future equity offerings.
 
In order to raise additional capital, we have
issued equity securities in the past and may in the future offer additional shares of our common stock or other securities convertible
into or exchangeable for our common stock at prices that may not be the same as the price per unit in our previous equity offering. The
price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in
future transactions, may be lower than the price per share paid by investors in our previous equity offering.
 
Shares of our common stock that have not
been registered under federal securities laws are subject to resale restrictions imposed by Rule 144, including those set forth in Rule
144(i) which apply to a former “shell company.”
 
Prior to the closing of the Share Exchange, we
were deemed a “shell company” under applicable SEC rules and regulations because we had no or nominal operations and either
no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents
and nominal other assets. Pursuant to Rule 144 promulgated under the Securities Act, sales of the securities of a former shell company,
such as us, under that rule are not permitted (i) until at least 12 months have elapsed from the date on which our Current Report on Form
8-K reflecting our status as a non-shell company, was filed with the SEC; (ii) unless at the time of a proposed sale, we are subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act and have filed all reports and other materials required to be filed
by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, other than Form 8-K reports; or (iii) until
the effectiveness of a registration statement under the Securities Act relating to our common stock. Therefore, unless we register such
shares of common stock for sale under the Securities Act, most of our shareholders will be forced to hold their shares of our common stock
for at least that 12-month period before they are eligible to sell those shares, and even after that period, sales may not be made under
Rule 144 unless we and the selling shareholders are in compliance with other requirements of Rule 144. Further, it will be more difficult
for us to raise funding to support our operations through the sale of debt or equity securities unless we agree to register such securities
under the Securities Act, which could cause us to expend significant time and cash resources. Additionally, our previous status as a shell
company could also limit our use of our securities to pay for any acquisitions we may seek to pursue in the future (although none are
currently planned). The lack of liquidity of our securities as a result of the inability to sell under Rule 144 for a longer period of
time than a non-former shell company could cause the market price of our securities to decline.
 


37
 

 
Item 1B. Unresolved Staff Comments.
 
Not applicable.
 
Item 1C. Cybersecurity.
 
Risk Management
 
We may face significant
and persistent cybersecurity risks due to the need to protect our business, our confidential information and information concerning our
personnel and others with whom we conduct business. As with other insurance brokerage companies, we occasionally face threats from actors
who seek to disrupt our business as well as others who are engaging in malicious activities for profit, to make a political point or for
no particular reason other than creating disruption. Disclosure of certain information as a result of a cybersecurity breach may result
in a breach of privacy laws. The substantial level of harm that could occur to us and our business partners and customers were we to suffer
impacts of a material cybersecurity incident; and our use of third-party products, services and components requires us to maintain robust
governance and oversight of these risks and to implement mechanisms, technologies and processes designed to help us assess, identify,
and eliminate these risks.
 
While we have not, as of the date of this
Report, experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, we cannot
assure you that we will not experience such an incident in the future. Any cybersecurity incidents, whether or not successful, could result
in our incurring additional costs related to, for example, rebuilding our internal systems, implementing additional threat protection
measures, responding to regulatory inquiries or actions, paying damages or making payments to obtain access to our computer systems, or
taking other remedial steps with respect to third parties, as well as incurring significant reputational harm. We seek to detect and investigate
unauthorized attempts and attacks against our network, products, and services, and to prevent their occurrence and recurrence where practicable
through changes or updates to our internal processes and tools and changes or updates to our products and services; however, we remain
potentially vulnerable to known or unknown threats. In some instances, we, our business partners and our customers can be unaware of a
threat or incident or its magnitude and effects. Further, there are increasing regulation requirements regarding responses to cybersecurity
incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. 
 
Governance
 
Following these risk
assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and
reasonably address any identified gaps in existing safeguards. Our responsible offer is directly supervising our employees’ compliance
of our internal safeguards and she reports to our Chief Executive Officer periodically and on an as-needed basis to manage our risk assessment
and mitigation process. We monitor and test our safeguards and regularly conduct training for our employees on these safeguards, in collaboration
with human resources, IT, and management. We are committed to promoting a company-wide culture of cybersecurity risk management.
 
We have not encountered
cybersecurity risks, threats or incidents that have materially affected or are reasonably likely to materially affect the Company, our
business strategy, results of operations, or financial condition during the fiscal year ended March 31, 2024. 
 
Item 2. Properties.
 
Our principal executive office is located at Room
1030B, 10/F, Ocean Centre, Harbour City, 5 Canton Road, Tsim Sha Tsui, Hong Kong.
 
We had two office leases, both with a lease term
of three years that the Company entered into in March 2022 (the “2022 Office Lease”) and in May 2023 (the “2023 Office
Lease”). The monthly rent is HK$57,684 and HK$27,412 for the 2023 Office Lease and 2022 Office Lease, respectively. We do not own
or lease any other properties.
 
Item 3. Legal Proceedings. 
 
[There are no pending legal proceedings to which
the Company or its subsidiaries are a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially
of more than 5% of any class of the Company’s voting securities, or security holder is a party adverse to the Company or has a material
interest adverse to the Company. We may from time to time be subject to legal or administrative claims and proceedings arising in the
ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result
in substantial cost and diversion of our resources, including our management’s time and attention.]
 
Item 4. Mine Safety Disclosures.
 
Not applicable.
 


38
 

 
PART II
 
Item 5. Market for Registrant’s Common
Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
 
(a) Market Information 
 
Our common stock is quoted on the OTCQB under
the symbol “QDMI” There has been limited trading in our shares of common stock. We cannot assure you that there will be an
active market in the future for our common stock.
 
The following table sets
forth, for the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not represent actual transactions.
 


  
Closing Prices (1) 

  
High  
Low 

FISCAL YEAR ENDED MARCH 31, 2023: 
   
  

First Quarter 
 2.3  
 0.91 

Second Quarter 
 0.91  
 0.08 

Third Quarter 
 0.08  
 0.08 

Fourth Quarter 
 0.10  
 0.08 

  
    
   

FISCAL YEAR ENDED MARCH 31, 2024: 
 0.10  
 0.10 

First Quarter 
 2.70  
 0.10 

Second Quarter 
 2.70  
 1.12 

Third Quarter 
 1.60  
 1.12 

Fourth Quarter 
    
   

 

(1)The above tables set forth
the range of high and low closing prices per share of our common stock as reported by www.otcmarket.com for the periods indicated.
Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

  
(b) Shareholders of Record
 
As of July 1, 2024, we had approximately 380
shareholders of record. Because certain shares of our common stock are held by brokers and other institutions on behalf of shareholders,
we are unable to estimate the total number of beneficial shareholders.
 
(c) Dividends 
 
We are permitted under the Florida law to provide
funding to our subsidiaries, including YeeTah, through loans or capital contributions without restrictions on the amount of the funds.
There are no restrictions or limitations on our ability to distribute earnings from our businesses, including subsidiaries, to the U.S.
investors or our ability to settle amounts owed. YeeTah is permitted under the laws of Hong Kong to provide funding to QDM HK and QDM
BVI, the holding company incorporated in Hong Kong and the British Virgin Islands, respectively, through dividend distribution without
restrictions on the amount of the funds, subject to availability of distributable profits and sufficient cash to maintain going concern
and solvency of YeeTah and any contractual obligations owed to third parties prohibiting or restricting dividend distributions. As of
the date of this Report, there has been no dividends or distributions between our holding company and our subsidiaries nor do we expect
such dividends or distributions to occur in the foreseeable future among our holding company and its subsidiaries.
 


39
 

 
However, the PRC government has significant authority
to intervene or influence the China operations of an offshore holding company at any time, and such oversight may also extend to our Hong
Kong operating subsidiary. We cannot assure you that the PRC government will not prevent us from transferring the cash we maintain in
Hong Kong outside of Hong Kong, or restrict our ability to deploy our cash into business or to pay dividends. We could also be subject
to limitations on the transfer or the use of our cash if we expand our business operations into China or conduct our operations in some
other ways such that we become subject to PRC laws that regulate these activities. In addition, if YeeTah incurs debt on its own behalf
in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Any
limitation on our ability to transfer or use our cash could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
 
We have never paid or declared any cash dividends
on our common stock. We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of
our business and do not anticipate paying cash dividends in the foreseeable future. The declaration of dividends on any class of shares
is within the discretion of the board of directors, subject to the Florida law, out of legally available funds, and will depend on the
assessment of, among other factors, earnings, capital requirements and our operating and financial condition. If we determine to pay dividends
on any of our capital stock in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong operating
subsidiary YeeTah. None of our subsidiaries has made any dividends or distributions to us. Under the current practice of the Inland Revenue
Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. There are no restrictions or limitation under
the laws of Hong Kong imposed on the conversion of HKD into foreign currencies and the remittance of currencies out of Hong Kong. See
“Item 1A. Risk Factors - Risks Related to Our Business and Industry - We rely on dividends and other distributions on equity
paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries
to make payments to us could have a material adverse effect on our ability to conduct our business.”
 
Any future determination related to our dividend
policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital
requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the
restrictions contained in any future financing instruments.
 
(d) Securities Authorized
for Issuance under Equity Compensation Plans
 
We currently do not have any equity compensation
plans.
 
(e) Recent Sales of Unregistered
Securities; Use of Proceeds from Registered Offering
 
During the past three fiscal years, we did not
offer or sell any unregistered securities that were not previously disclosed in a quarterly report on Form 10-Q or in a current report
on Form 8-K.
 
(f) Purchases of Equity
Securities by the Issuer and Affiliated Purchasers 
 
None.
 
Item 6. [Reserved].
 
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
 
The following discussion
and analysis is based on, and should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere
in this Report. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are
forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other
factors. These statements are often identified by the use of words such as “may,” “will,” “expect,”
“believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,”
and similar expressions or variations. Actual results could differ materially because of the factors discussed in “Risk Factors”
elsewhere in this Report, and other factors that we may not know.
 


40
 

 
Overview
 
From 2016 to 2020, we
were a telemedicine company that provides Connect-a-Doc telemedicine kits to schools. Our services aimed to provide alternatives to schools
that desire to provide a higher level of healthcare to their students but are unable to keep a full-time school nurse available. In 2020
this business was discontinued and we became a non-operating “shell” company until our acquisition of YeeTah, as more fully
described below.
  
On October 21, 2020,
we entered into the Share Exchange Agreement with QDM BVI, and Huihe Zheng, the sole shareholder of QDM BVI, who is also our principal
stockholder and serves as our Chairman and Chief Executive Officer, to acquire all the issued and outstanding capital stock of QDM BVI
in exchange for the issuance to Mr. Zheng 30,000 shares (900,000 shares before the Reverse Split) of a newly designated Series C Preferred
Stock, with each share of Series C Preferred Stock initially being convertible into 11 shares of our common stock, subject to certain
adjustments and limitations. The Share Exchange closed on October 21, 2020.
 
As a result of the consummation
of the Share Exchange, we acquired QDM BVI and its indirect subsidiary, Yeetah, an insurance brokerage company primarily markets and sells
diversified insurance products, including property, life and social security insurance products, underwritten by insurance companies operating
in Hong Kong to individual customers from Hong Kong SAR and Mainland China. In addition, as a MPF intermediary, Yeetah also assists its
customers with their investment through the MPF and the ORSO in Hong Kong, both of which are retirement protection schemes set up for
employees. Following the closing of the transaction, we have assumed the business operations of QDM BVI and its subsidiaries.
 
On November 3, 2021,
the Company acquired 100% of the issued and outstanding shares of QDMS, a company incorporated on February 6, 2020 in Cyprus. The Company
acquired QDMS through an intermediary holding company, LGL, which was incorporated on July 29, 2021 in the BVI. Before the acquisition,
Huihe Zheng was the sole shareholder of QDMS. As part of the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration
of EUR5,000 in November 2021 and at the same time the sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to the Company
for a consideration of USD$1.00. As a result, the Company acquired a 100% ownership of LGL, which, in turn, owns 100% of QDMS. QDMS plans
to engage in the research and development of customer relationship management (“CRM”) software as a service (“SaaS”),
with a business model derived from “customer-centered” CRM concept to improve enterprise-customers relationship. In October
2023, the Company sold QDMS to Mr. Huihe Zheng for no consideration following its decision not to pursue its plan to provide CRM SaaS
Services.
 
In March 2023, the Company
consummated a closing of a public offering of its common stock, par value $0.0001 per share (the “2023 Offering”), in which
the Company issued and sold an aggregate of 289,104,000 shares of its common stock at a price of $0.081 per share to certain investors,
generating gross proceeds to the Company of $2,339,937.
 
On October 4, 2023, the
Company sold QDMS to Mr. Zheng for no consideration. As a result of the disposition, the Company recognized a gain of $33,165.
 
Results of Operations
 
Years Ended March 31, 2024 and 2023
 
The following table presents an overview of the
results of operations for the years ended March 31, 2024 and 2023:
 


 
 
For the Year Ended  March 31,
 

 
 
2024
 
 
2023
 

Revenue
 
$
6,366,154
 
 
$
1,133,146
 

Cost of sales
 
 
3,912,743
 
 
 
716,751
 

Gross profit
 
 
2,453,411
 
 
 
416,395
 

 
 
 
 
 
 
 
 
 

Operating expenses
 
 
 
 
 
 
 
 

General & administrative expenses
 
$
652,836
 
 
$
374,142
 

Total operating expenses
 
 
652,836
 
 
 
374,142
 

 
 
 
 
 
 
 
 
 

Income from operations
 
 
1,800,575
 
 
 
42,253
 

 
 
 
 
 
 
 
 
 

Total other income
 
 
(73,006
)
 
 
(2,297
)

 
 
 
 
 
 
 
 
 

Current income tax expenses
 
 
309,043
 
 
 
—
 

 
 
 
 
 
 
 
 
 

Net income
 
$
1,564,538
 
 
$
44,550
 

 
Revenue
 
Revenue increased by approximately $5.2 million,
or 461.8%, for the year ended March 31, 2024 as compared to the fiscal year of 2023. The increase was mainly due to the lifting of COVID-19
travel restrictions and quarantine measures in Hong Kong and mainland China. Customers from mainland China contributed to a large part
of YeeTah’s commissions. Due to COVID-19, insurance brokers in Hong Kong were significantly affected by the implementation of travel
restrictions and social distancing measures. These restrictions and measures resulted in a significant decrease in new business for insurance
brokers, including YeeTah, that rely on in-person consultations and storefronts for customer acquisition because Hong Kong regulations
require the customers’ physical presence in Hong Kong to execute the insurance policy contracts and make payments. As a result of
the lifting of the travel restrictions, mainland Chinese customers can travel to Hong Kong again and purchase insurance policies.
 


41
 

 
Cost of sales
 
The amounts increased by approximately $3.2 million
or 445.9% for the year ended March 31, 2024 as compared to the same period of 2023. The increase was due to the significant increases
of revenue.
 
General and administrative expenses 
 
General and administrative expenses generally
are fixed and consist primarily of employee salaries, office rents, insurance costs, depreciation expenses, general office operating expenses
(e.g., utilities, repairs and maintenance) and professional fees.
 
General and administrative expenses increased
by approximately $279,000, or 74.5%, for the year ended March 31, 2024 as compared to the same period of 2023. The change is
primarily due to the fact that there were more rent expenses in relation to the 2023 Office Lease entered in April 2023 and hiring of
one employee due to business expansion.
 
Current income tax expenses
 
Current income tax expenses increased by approximately
$309,000, or 100%, for the year ended March 31, 2024 as compared to the same period of 2023. The change is primarily due to
increase in profits in the year ended March 31, 2024.
 
Other income
 
Other income increased by approximately $71,000,
or 3,078.3%, for the year ended March 31, 2024 as compared to the same period of 2023. The change is primarily due to the Company’s
recognition of a gain of $33,165 from the disposition of QDMS, receipt of approximately $30,000 in referral fees by introducing client
to the sub-broker, and increase in interest income.
 
Net income after income tax

 
As a result of the factors described above, net
income for the year ended March 31, 2024 increased by approximately $1.5 million, or 3,411.9%, as compared to the same period of 2023,
which incurred a net income of approximately $45,000. 
 
Liquidity and Capital Resources
 
Our working capital requirements mainly comprise
of commissions paid to technical representatives and referral fees, operating lease payments and employee salaries. We have financed our
operations primarily through cash generated by operating activities, equity financings and advances from our principal shareholder. QDM
is a holding company and conducts substantially all of its operations through YeeTah, which is its only entity that has operating cash
inflows. Our expenses are paid directly either by YeeTah or our principal shareholder.
 
Yeetah is a licensed insurance broker
company in Hong Kong and subject to certain Hong Kong insurance broker requirements regarding its share capital and net assets.
According to the requirements, a licensed insurance broker company must at all times maintain a paid-up share capital of not less
than USD64,103 (HK$500,000) and net assets of not less than USD64,103 (HK$500,000), subject to the phase-in transitional arrangement
applicable to specified insurance broker companies, including Yeetah, pursuant to which, Yeetah is required to maintain the amount
of paid-up share capital and net assets of (i) not less than USD12,821 (HK$100,000) for the period from September 23, 2019 to
December 31, 2021 and (ii) not less than USD38,462 (HK$300,000) for the period from January 1, 2022 to December 31, 2023. Yeetah was
in compliance with the applicable minimum paid-up share capital and net assets requirements as of March 31, 2024.
 
There have been no cash and any asset transactions
between us and our subsidiaries since the Share Exchange. As of March 31, 2024 and March 31, 2023, we had $5,158,223 and $2,717,745, respectively,
in cash and cash equivalents, which primarily consisted of cash deposited in banks.
 


  
Year Ended March 31, 2024  
Year Ended March 31, 2023 

Net cash provided by operating activities 
$2,208,037  
$11,813 

Net cash used in investing activities 
 (100,241) 
 (17,503)

Net cash provided by financing activities 
 332,886  
 2,653,431 

Effect of Exchange rate changes on cash 
 (204) 
 346 

Net increase in cash, cash equivalents 
 2,440,478  
 2,648,087 

Cash and cash equivalents at beginning of period 
 2,717,745  
 69,658 

Cash and cash equivalents at end of period 
$5,158,223  
$2,717,745 

 


42
 

 
Operating Activities:
 
Net cash generated from operating activities was
approximately $2.2 million for the year ended March 31, 2024, compared to net cash generated from operating activities of approximately
$12,000 for 2023, representing an increase of approximately $2.2 million in the net cash inflow in operating activities. The increase
in net cash generated from operating activities was primarily due to an increase of net income of approximately $1.5 million in the year
ended March 31, 2024 as compared to the same period of 2023 and the following major working capital changes:
 


 
(1)
Change in accounts receivable resulted in an approximately $108,000 cash inflow for the year ended March 31, 2024 compared to an approximately $289,000 cash outflow for the same period of 2023, which led to an approximately $398,000 increase in net cash inflow in operating activities.

 
 
 

 
(2)
Change in accounts payable and accrued liabilities resulted in an approximately $344,000 cash inflow for the year ended March 31, 2024 compared to an approximately $208,000 cash inflow for the same period of 2023, which led to an approximately $136,000 increase in net cash inflow from operating activities.

 
 
 

 
(3)
Change in short-term and long-term prepaid expenses resulted in an approximately $116,000 cash outflow for the year ended March 31, 2024 compared to nil cash outflow for the same period of 2023, which led to an approximately $116,000 increase in net cash outflow from operating activities.

 


 
(4)
Change in income tax payable resulted in an approximately $309,000 cash inflow for the year ended March 31, 2024 compared to nil cash inflow for the same period of 2023, which led to an approximately $309,000 increase in net cash inflow from operating activities.

 
Investing Activities:
 
Net cash used in investing
activities was approximately $100,000 for the year ended March 31, 2024, which was attributable to the net results of: (i) acquisitions
of fixed assets of approximately $93,000; (ii) disposition of subsidiaries of approximately $8,000.
 
Net cash used in investing
activities was approximately $18,000 for the year ended March 31, 2023, which was solely attributable to acquisitions of fixed assets.
 
Financing Activities:
 
Net cash generated from financing activities was
approximately $333,000 for the year ended March 31, 2024, which was fully attributable to stockholder advances to the Company during the
period.
 
Net cash generated from financing activities was
approximately $2,653,000 for the year ended March 31, 2023, which was attributable to the net results of: (i) related-party advances of
approximately $224,000; (ii) stockholder contribution of $150,000; (iii) proceeds of approximately $2,340,000 received from equity financing;
and (iv) share issuance costs of approximately $61,000 incurred for equity financing.
 
Material Commitments
 
We have no material commitments
for the next twelve months.
 
We had two office lease
agreement and our lease commitments as of March 31, 2024 are summarized as follows:
 
Operating lease
  


  
2022 Office Lease  
2023  Office Lease  
Total 

2025 
 35,143  
 88,745  
 123,888 

2026 
 —  
 88,745  
 88,745 

2027 
 —  
 6,441  
 6,441 

Total future minimum lease payments 
$35,143  
$183,931  
$219,074 

Less: imputed interest 
 (777) 
 (19,012) 
 (19,789)

Total operating lease liability 
$34,366  
$164,919  
$199,285 

Less: operating lease liability - current 
 34,366  
 75,190  
 109,556 

Total operating lease liability – non current 
$—  
$89,729  
$89,729 

  


43
 

 
Critical Accounting Estimates
 
The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
contingent assets and liabilities, each as of the date of the financial statements, and revenues and expenses during the periods presented.
On an ongoing basis, management evaluates their estimates and assumptions, and the effects of any such revisions are reflected in the
financial statements in the period in which they are determined to be necessary. Management bases their estimates on historical experience
and on various other factors that they believe are reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual outcomes could differ
materially from those estimates in a manner that could have a material effect on our consolidated financial statements.
 
While our significant accounting policies are
more fully described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, we believe
that there were no critical accounting policies and estimates that affect the preparation of financial statements. 
 
Off-balance Sheet Commitments and Arrangements
 
As of March 31, 2024, the Company did not have
any material off-balance sheet arrangements that had or were reasonably likely to have any effect on their respective financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
 
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
 
The Company is not required to provide the information required by
this Item as it is a “smaller reporting company”
 
Item 8. Financial Statements and Supplementary Data.
 
The information required by this Item is included in this Report as
set forth in the “Index to Financial Statements” which appears on page F-1 of this Annual Report on Form 10-K,
after the signature pages of this Annual Report, and is incorporated by reference herein.
 
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure.
 
None.
 


44
 

 
Item 9A Controls and Procedures
 
Disclosure controls and procedures are controls
and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer
(collectively, the “Certifying Officers”) or persons performing similar functions, as appropriate, to allow timely decisions
regarding required disclosure.
 
Under the supervision of our Certifying Officers,
we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures
were not effective as of March 31, 2024 due to the material weakness in our internal control over financial reporting discussed below.
 
Management’s Report on Internal Controls over Financial Reporting
 
Management is responsible for establishing and
maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial
reporting, as required by Section 404 of the Sarbanes-Oxley Act. In making this assessment, management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A
material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented
or detected on a timely basis. We have identified the following material weaknesses, which are indicative of many small companies with
small staff, as of March 31, 2024: (i) lack of proper segregation of duties and risk assessment process; (ii) lack of formal documentation
in internal controls over financial reporting; and (iii) lack of independent directors and an audit committee.
 
Because of these material weaknesses, management
has concluded that we did not maintain effective internal control over financial reporting as of March 31, 2024, based on the criteria
established in “2013 Internal Control-Integrated Framework” issued by COSO.
 
The Company plans to design and implement the
internal control procedures commensurate to the size of the Company to remediate the above three areas of material weaknesses when resources
are available.
 
This Report does not include an attestation report
of our independent registered public accounting firm regarding internal control over financial reporting.
 
Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control
over financial reporting during the fiscal year ended March 31, 2024 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
 
Item 9B. Other Information
 
None.
 
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections
 
Not applicable.
 


45
 

 
PART III
 
 
Item 10. Directors, Executive Officers and Corporate Governance. 
 
The following tables set forth the respective
positions and ages of the directors and executive officers of the Company as of the date of this Report. Each director of the Company
has been elected to hold office until the next annual meeting of shareholders and until his or her successor is duly elected and qualified.
 


Name
 
Age 
 
Positions
 

Huihe Zheng
 
43
 
Chairman of the Board, Chief Executive Officer and President
 

Tim Shannon
 
62
 
Chief Financial Officer
 

Timothy Miles
 
78
 
Director
 

Huili Shen
 
42
 
Secretary and director
 

 
Biographical Information
 
Huihe Zheng has more than twenty
years of experience in investment and wealth management. Mr. Zheng has served as Chairman of Shanghai Dingchan Industrial Co., Ltd., a
company primarily engaged in wholesale and distribution of computer equipment and components since he founded the company in November
2013. Mr. Zheng has served as Chief Executive Officer and Chairman of Shanghai Hewu Investment Management Co., Ltd., an investment company,
since he founded the company in January 2016. Mr. Zheng served as a director, Chief Executive Officer and President of 24/7 Kid from March
2020 to its dissolution in September 2022. From 1999 to 2016, Mr. Zheng primarily focused on securities trading in stock markets in China
and abroad for his own account. We believe Mr. Zheng’s experience in business management, investment and capital market qualifies
him to serve on our board of directors.
 
Tim Shannon has served as the Chief
Financial Officer of the Company since March 2020. Mr. Shannon served as the Chief Financial officer and director of 24/7 Kid from 2005
to 2020 and the President and Chief Executive Officer of 24/7 Kid from 1998 until 2020. From 1990 to 1994, Mr. Shannon was an investment
advisor with Great Western Securities and Hearn Financial Services in Orlando, Florida. In 1995, he co-founded Shannon/Rosenbloom Marketing,
a marketing and investor relations company, with Brian Rosenbloom, a former director of 24/7 Kid and served as its Vice President from
July 1995 to November 1998. Mr. Shannon spent six years as a system engineer and marketing representative with IBM after graduating in
1983 from the University of South Florida’s Engineering College with a bachelor’s degree in computer science.
 
Timothy Miles has been the president
and owner of Happiness Now Hypnosis, a hypnotherapy company, since 2016. Mr. Miles has served as a director of the Company since January
2020. From 1999 through 2016, Mr. Miles was the president of Littlepond Enterprises, Inc., a business consulting firm. Mr. Miles attended
the University of California at Davis, but did not receive a degree. We believe Mr. Miles’ decades’ experience in business
management and consulting qualifies him to serve on our board of directors.
 
Huili Shen has served as the managing
graphic designer at Ctrip Travel Network Technology Co., Ltd., a travel services company, since November 2010. From July 2008 to October
2010, Ms. Shen was an assistant graphic designer at Huiguang Technology Co., Ltd, a software company. From May 2006 to June 2008, Ms.
Shen served as lead web designer of a team of four at Ctrip Travel Network Technology Co., Ltd., a travel services company. From September
2003 to April 2006, Ms. Shen worked as a graphic designer at Haotian Technology Shanghai Co., Ltd., a software company. Ms. Shen graduated
from Sanda University with a bachelor’s degree in web design in 2003. We believe Ms. Shen’s experience in management qualified
her to serve on our board of directors.
 


46
 

 
Director Independence
 
We are not currently listed on a national stock
exchange and not required to maintain a majority of independent directors. However, we believe that Timothy Miles qualifies as an independent
director as defined under the rules of the OTCQB.
 
Family Relationships
 
There are no family relationships among our directors
and executive officers.
 
The Board and Committees
 
We do not have any independent directors. We are
not required to maintain a majority of independent directors or the foregoing committees under the rules applicable to companies that
do not have securities listed or quoted on a national securities exchange. Our board of directors does not maintain a separate audit,
nominating, or compensation committee. Functions customarily performed by such committees are performed by our board of directors as a
whole.
 
Involvement in Certain Legal Proceedings
 
None of our directors and executive officers have
been involved in any of the following events during the past ten years:
 


 
●
any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 
 
 

 
● 
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 
 
 

 
● 
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;

 
 
 

 
● 
being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

 
 
 

 
● 
being subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 
 
 

 
● 
being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. 

 
Code of Conduct and Ethics
 
We currently do not have a Code of Ethics and
plan to adopt one as we develop our business.
 

47
 

 
Section 16 Compliance
 
Section 16(a) of the Securities Exchange Act of
1934, as amended, requires the Company’s officers, directors and persons who beneficially own more than ten percent of its common
stock to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on our review of such forms furnished to us, we believe that all reports
applicable to our executive officers, directors and greater than ten percent beneficial owners were filed in a timely manner in accordance
with Section 16(a) of the Exchange Act except that each of Messrs. Zheng and Shen failed to file a Form 4 after the 2023 Offering.
 
Item 11. Executive Compensation.
 
The following table sets forth the cash and non-cash
compensation awarded to or earned by each individual who served as the executive officer during the fiscal years ended March 31, 2024
and 2023.
 
Summary of Executive Compensation Table 
 


Name and Principal Position 
Year 
Salary ($)  
Stock
 Awards ($)  
Option
 Awards ($)  
Nonqualified
 Deferred
 Compensation
 Earnings ($)  
All Other
 Compensation ($)  
Total ($) 

Huihe Zheng 
2024 
 —  
 —  
 —  
 —  
 —  
 — 

Chief Executive Officer and Chairman 
2023 
 —  
 —  
 —  
 —  
 —  
 — 

  
  
    
    
    
    
    
   

Tim Shannon 
2024 
 9,000  
   
 —  
 —  
   
 9,000 

Chief Financial Officer 
2023 
 —  
 8,000  
 —  
 —  
 —  
 8,000 

 
Outstanding Equity Awards at Fiscal Year End
 
None.
 
Employment Agreements
 
We presently do not have any employment agreements
or other compensation arrangements with our executive officers.
 
Director Compensation 
 
Directors received no stock compensation in the
fiscal year ended March 31, 2024. During the fiscal year ended March 31, 2024, Mr. Miles was paid a cash fee of $9,000.
  


48
 

 
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
 
The following table sets forth certain information
known to us with respect to the beneficial ownership of common stock by (i) each person, entity or group (as that term is used in Section
13(d)(3) of the Exchange Act) known to us to be the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each
of our directors and executive officers, and (iii) all of our directors and executive officers as a group. The percentage of class is
based on 291,563,930 shares of common stock, 13,500 shares of Series B Preferred Stock, and 531,886 shares of Series C Preferred Stock
issued and outstanding as of the date of this Report.
 


Name of Beneficial Owner
    5% Stockholders 
Number of
 Shares of
 Common
 Stock

    Owned  
Percentage of
Shares of
 Common
 Stock

    Owned  
Number of
 Shares of
 Series B
 Preferred

    Stock
 Owned  
Percentage of
 Shares of
 Series B

    Preferred Stock
 Owned  
Number of
 Shares of
 Series C
 Preferred

    Stock
 Owned  
Percentage of
 Shares of
 Series C

    Preferred
 Stock
 Owned  
Percentage
of
Aggregate
Voting
Power (1)(2) 

HW FUND(3) 
 120,000,000  
 41.2% 
 -  
 -  
 -  
 -  
 40.7%

Willington Capital Limited(4) 
 50,000,000  
 17.2% 
 -  
 -  
 -  
 -  
 17.0%

Ruiyin Capital Limited(5) 
 48,000,000  
 16.5% 
 -  
 -  
 -  
 -  
 16.3%

Bakelai Capital Limited(6) 
 50,000,000  
 17.2% 
 -  
 -  
 -  
 -  
 17.0%

Directors and Officers 
    
    
    
    
    
    
   

Huihe Zheng(3) 
 121,588,100  
 41.7% 
 13,500  
 100% 
 531,886  
 100% 
 42.4%(1)(2)

Tim
Shannon    (7) 
 81,960  
 *  
 -  
 -  
 -  
 -  
 * 

Huili Shen(4) 
 50,001,670  
 17.1% 
 -  
 -  
 -  
 -  
 17.0%

Timothy Miles(8) 
 81,670  
 *  
 -  
 -  
 -  
 -  
 * 

All officers and directors as a group (four persons) 
 171,753,400  
 59.4% 
 13,500  
 100% 
 531,886  
 100% 
 59.4%

 

*Less than one percent.

 

(1)Each share of Series B Preferred
Stock entitles the holder to 100 votes on all corporate matters submitted for shareholder approval.

 

(2)Each share of Series C Preferred
Stock entitles the holder to approximately 3.67 votes on all corporate matters submitted for shareholder approval.

 

(3)120,000,000 shares of common stock
directly held by HW FUND, of which Huihe Zheng, our Chief Executive Officer and President, is the controlling shareholder and holds the
voting and dispositive power over the shares of common stock held by such entity. The address for this shareholder is Vistra (Cayman)
Limited, P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands.

 

(4)50,000,000 shares of common stock
directly held by Willington Capital Limited, of which Huili Shen, our director, is the sole shareholder and director and holds the voting
and dispositive power over the shares of common stock held by such entity. The address for this shareholder is Rm 4F, 15/F, Sunwise Industrial
Building, 16-26 Wang Wo Tsai Street, Tsuen Wan, Hong Kong.

 

(5)Erkai Wang is the sole shareholder
and director of Ruiyin Capital Limited. The address for this shareholder is Rm 4G, 15/F, Sunwise Industrial Building, 16-26 Wang Wo Tsai
Street, Tsuen Wan, Hong Kong.

 

(6)Shimei Zhou is the sole shareholder
and director of Bakelai Capital Limited. The address for this shareholder is Rm 4, 15/F, Sunwise Industrial Building, 16-26 Wang Wo Tsai
Street, Tsuen Wan, Hong Kong.

 

(7)The address for this shareholder
is 2035 Highway A1A, #306 Indian Harbour Beach, FL 32937.

 

(8)The address for this shareholder
is PO Box 30, Dundee, MI 48131.

 


49
 

 
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
 
Related Parties
  


Name of related parties
 
Relationship with the Company

Siu Ping Lo
 
Responsible officer of YeeTah

Huihe Zheng
 
Principal shareholder, Chief Executive Officer and Chairman of the Company

YeeTah Financial Group Co., Ltd. (“YeeTah Financial”)
 
A company previously controlled by Siu Ping Lo 

Ouya Properties Group Ltd. (“OPG”)
 
A company controlled by Huihe Zheng

  
Related Party Transactions
 
We had the following related party transactions for the fiscal years
ended March 31, 2024 and 2023:
 


 
(i)
During the year ended March 31, 2024, YeeTah Financial ceased to be a related party to the Company since YeeTah Financial is no longer controlled by Siu Ping Lo. During the year ended March 31, 2023, YeeTah Financial charged YeeTah US$43,586 commission expenses in relation to insurance referral services rendered by YeeTah Financial.

 
 
 

 
(ii)
During the year ended March 31, 2024, Huihe Zheng advanced US$244,313 to the Company to support its operations, compared to US$220,350 advanced during the year ended March 31, 2023.

 
 
 

 
(ii)
During the year ended March 31, 2024, OPG advanced nil to the Company to support its operations, compared to US$3,202 advanced during the year ended March 31, 2023.

  
Due to Related Party Balance
 
The Company’s due to related party balance
is as follows:
 


  
March 31, 2024  
March 31, 2023 

  
US$  
US$ 

Huihe Zheng 
 1,283,221  
 1,035,730 

OPG 
 —  
 3,202 

YeeTah Financial 
 —  
 8,176 

Total 
 1,283,221  
 1,047,108 

  
The due to related party balance is unsecured,
interest-free and due on demand.
 


50
 

 
Subscription Receivable Due from a Shareholder
 
The Company’s subscription receivable due
from a stockholder balance is as follows:
  


  
March 31, 2024  
March 31, 2023 

  
US$  
US$ 

Huihe Zheng 
 —  
 48,718 

  
The due from shareholder balances represent the
purchase price for shares of QDM BVI to be paid by Mr. Huihe Zheng. The due from a stockholder balance as of March 31, 2023 was unsecured,
interest-free and due on demand. The subscription receivable from Mr. Huihe Zheng has been offset against the balance that the Company
owed to him.
 
Policies for Approval of Related Party Transactions
 
Our Board reviews and approves transactions with
directors, officers and holders of five percent or more of our voting securities and their affiliates, each a related party. The material
facts as to the related party’s relationship or interest in the transaction are disclosed to our Board prior to their consideration
of such transaction, and the transaction was not considered approved by our Board unless a majority of the directors who are not interested
in the transaction approved the transaction. Further, when stockholders are entitled to vote on a transaction with a related party, the
material facts of the related party’s relationship or interest in the transaction were disclosed to the stockholders, who must approve
the transaction in good faith.
 
Item 14. Principal Accountant Fees and Services.
 
The following table sets forth fees billed to
us by our independent registered public accounting firm, ZH CPA, LLC, during the fiscal years ended March 31, 2024 and 2023 for: (i) services
rendered for the audit of our annual financial statements and the review of our quarterly financial statements; (ii) services by our independent
registered public accounting firms that are reasonably related to the performance of the audit or review of our financial statements and
that are not reported as audit fees; (iii) services rendered in connection with tax compliance, tax advice and tax planning; and (iv)
all other fees for services rendered.
 


 
 
2024
 
 
2023
 

Audit Fees
 
$
70,000
 
 
$
42,500
 

Audit-Related Fees
 
 
—
 
 
 
—
 

Tax Fees
 
 
—
 
 
 
—
 

All Other Fees
 
 
—
 
 
 
—
 

Total
 
$
70,000
 
 
$
42,500
 

 
Pre-Approval Policies and Procedures
 
Our board of directors is responsible for approving
all related party transactions. We have not adopted written policies and procedures specifically for related party transactions.
 


51
 

 
PART IV
 
Item 15. Exhibits, Financial Statement Schedules.
 
(1) Financial Statements
 
Financial Statements and Report of Independent
Registered Public Accounting Firm are set forth on pages F-1 through F-17 of this Report.
 
(2) Financial Statement Schedules
 
Schedules are omitted because the required information
is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is given
in the consolidated financial statements or the notes thereto.
 
(3) Exhibits
 


Exhibit No.
 
Description

3.1
 
Articles of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K12G3 filed on May 1, 2020

3.2
 
Articles of Amendment to Articles of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 16, 2021

3.3
 
Certificate of Designation of Series C Convertible Preferred Stock filed on October 8, 2020, incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on October 27, 2020

3.4
 
Bylaws, incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K12G3 filed on May 1, 2020

3.5
 
Articles of Amendment to Articles of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 10, 2024

4.1*
 
Description of Securities

10.1+
 
Broker Agreement dated November 16, 2015, by and between Company A and YeeTah Insurance Consultant Limited, as supplemented, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 27, 2020

10.2+
 
Broker’s Contract, dated October 19, 2015, by and between Company B and YeeTah Insurance Consultant Limited, as supplemented, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 27, 2020

10.3+
 
Agreement dated November 6, 2017, by and between Company C and YeeTah Insurance Consultant Limited, incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 27, 2020

21.1*
 
List of Subsidiaries

31.1*
 
Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302

31.2*
 
Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302

32.1**
 
Certification by Chief
    Executive Officer pursuant to 18 U.S.C. Section 1350

32.2** 
 
Certification by Chief
    Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS *
 
Inline XBRL Instance Document.

101.SCH *
 
Inline XBRL Taxonomy Extension Schema Linkbase Document.

101.CAL *
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF *
 
Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB *
 
Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE *
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104 *
 
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
 


*
Filed herewith.

**
Furnished herewith.

+
Portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company hereby agrees to furnish a copy of any omitted portion to the SEC upon request.

 
Item 16. FORM 10-K SUMMARY
 
Not applicable.
 


52
 

 


SIGNATURES
 
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
 


 
QDM International Inc.

 
 
 

Date: July 1, 2024
By:
/s/ Huihe Zheng

 
Name: 
Huihe Zheng

 
Title:
Chairman of the Board, Chief Executive Officer, and President

 
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
 



Signature
 
Title
 
Date

 
 
 
 
 

/s/ Huihe Zheng
 
Chairman of the Board, Chief Executive Officer
 
July 1, 2024

Huihe Zheng
 
(principal executive officer), and President
 
 

 
 
 
 
 

/s/ Tim Shannon
 
Chief Financial Officer
 
July 1, 2024

Tim Shannon 
 
(principal accounting and financial officer) 
 
 

 
 
 
 
 

/s/ Timothy Miles
 
Director
 
July 1, 2024

Timothy Miles
 
 
 
 

 
 
 
 
 

/s/ Huili Shen
 
Secretary and Director
 
July 1, 2024

Huili Shen
 
 
 
 

  

53
 

 
Index to the Financial Statements 
 
  Page  Reports of Independent Registered Public Accounting Firm (PCAOB ID:6413) F-2       Consolidated Balance Sheets as of March 31, 2024 and 2023 F-3       Consolidated Statements of Operations for the Years Ended March 31, 2024 and 2023 F-4       Consolidated Statement of Changes in Stockholders’ Deficit for the Years Ended March 31, 2024 and 2023 F-5       Consolidated Statements of Cash Flows for the Years Ended March 31, 2024 and 2023 F-6       Notes to Consolidated Financial Statements F-7 
 

F-1
 

 






 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Shareholders and Board of Directors of
QDM International Inc.
 
Opinion on the Consolidated Financial Statements
 
We have audited the accompanying consolidated balance sheets of QDM
International Inc. (the Company) as of March 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income,
stockholders’ equity, and cash flows for each of the years in in the two-year period ended March 31, 2024, and the related notes
(collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company as of March 31, 2024 and 2024, and the results of its operations and its
cash flows for each of the years in the two-year period ended March 31, 2024, in conformity with accounting principles generally accepted
in the United States of America.
 
Basis for Opinion
 
These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based
on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
 
We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain
an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for
our opinion.
 
Critical Audit Matters
 
Critical
audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required
to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
 
  /s/ ZH CPA, LLC   
 
We
have served as the Company’s auditor since 2021
Denver, Colorado
July 1, 2024
 
 
999 18th Street,
Suite 3000, Denver, CO, 80202, USA. Phone: 1.303.386.7224 Fax: 1.303.386.7101 Email: admin@zhcpa.us

 

F-2
 

 
QDM INTERNATIONAL INC. 
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2024 AND 2023
  


  
March 31, 2024  
 March 31,
    2023 

  
   
  

ASSETS 
   
  

Current assets: 
   
  

Cash and cash equivalents 
$5,158,223  
$2,717,745 

Accounts receivable 
 183,612  
 291,900 

Prepaid expenses 
 103,403  
 18,856 

Total current assets 
 5,445,238  
 3,028,501 

  
    
   

Right of use assets – operating lease 
 196,141  
 75,557 

Long-term prepaids 
 59,583  
 27,720 

Property and equipment, net 
 75,327  
 18,256 

  
    
   

Total assets 
$5,776,289  
$3,150,034 

  
    
   

LIABILITIES AND STOCKHOLDERS’ DEFICIT 
    
   

Current liabilities: 
    
   

Accounts payable & accrued liabilities 
$566,780  
$222,753 

Operating lease liabilities - current 
 109,556  
 29,393 

Income tax payable 
 309,043  
 — 

Due to related party 
 1,283,221  
 1,047,108 

  
    
   

Total current liabilities 
 2,268,600  
 1,299,254 

  
    
   

Operating lease liabilities – non current 
 89,729  
 44,406 

Total liabilities 
 2,358,329  
 1,343,660 

  
    
   

Stockholders’ equity: 
    
   

Preferred stock, $0.0001 par value, 30,000,000 shares authorized, 545,386 and 545,386 issued and outstanding as of March 31, 2024 and 2023, respectively 
 54  
 54 

Common stock, $0.0001 par value, 700,000,000 shares authorized, 291,563,930 and 291,563,930 shares issued and 291,559,200 and 291,559,200 shares outstanding as of March 31, 2024 and 2023, respectively 
 3,519  
 3,519 

Subscription receivable 
 —  
 (48,718)

Treasury stock, 473 and 473 shares at cost 
 (60,395) 
 (60,395)

Additional paid-in capital 
 11,901,231  
 11,901,231 

Accumulated deficit 
 (8,426,449) 
 (9,990,987)

Accumulated other comprehensive income 
 —  
 1,670 

Total stockholders’ equity 
 3,417,960  
 1,806,374 

  
    
   

Total liabilities and stockholders’ equity 
$5,776,289  
$3,150,034 

 
*Retrospectively applied for effect of Forward
stock split on April 5, 2024
See accompanying notes
to consolidated financial statements.
 

F-3
 

 
QDM INTERNATIONAL INC. 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
FOR THE YEARS ENDED MARCH 31 2024 AND 2023
 


  
For the Years Ended  March
    31, 

  
2024  
2023 

  
   
  

Revenue 
$6,366,154  
$1,133,146 

Cost of sales 
 3,912,743  
 716,751 

Gross profit 
 2,453,411  
 416,395 

  
    
   

Operating expenses 
    
   

General & administrative expenses 
$652,836  
$374,142 

Total operating expenses 
 652,836  
 374,142 

  
    
   

Income from operations 
 1,800,575  
 42,253 

  
    
   

Other (income) expense 
    
   

Finance costs 
 951  
 1,195 

Gain from disposition of subsidiaries 
 (33,165) 
 — 

Other income (expense), net 
 (40,792) 
 (3,492)

Total other income 
 (73,006) 
 (2,297)

  
    
   

Income before income taxes 
 1,873,581  
 44,550 

  
    
   

Current income tax expense 
 309,043  
 — 

  
    
   

Net income 
$1,564,538  
$44,550 

  
    
   

Other comprehensive income 
    
   

Currency translation adjustment 
 (1,670) 
 337 

Total comprehensive income 
$1,562,868  
$44,887 

  
    
   

Earnings per share of common stock: 
    
   

Basic 
$0.01  
$0.01 

Diluted 
$0.01  
$0.01 

  
    
   

Weighted average basic & diluted shares outstanding: 
    
   

Preferred stocks 
 545,386  
 545,386 

Common 
 291,559,200  
 3,700,500 

 
*Retrospectively applied for effect of Forward
stock split on April 5, 2024
See accompanying notes
to consolidated financial statements.
 

F-4
 

 
QDM INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2024 AND 2023
 


  
   
   
   
   
   
   
   
   
   
Accumulated  
  

  
   
   
   
Preferred  
Common  
   
Additional  
   
   
Other  
  

  
Preferred  
Common  
Treasury  
Stock  
Stock  
Treasury  
Paid-in  
Subscription  
Accumulated  
Comprehensive  
  

  
Stock  
Stock  
Stock  
Amount  
Amount  
Amount  
Capital  
Receivable  
Deficit  
Income  
Total 

  
   
   
   
   
   
   
   
   
   
   
  

Balance March 31, 2022 
 545,386  
 2,099,930  
 (473) 
$54  
$624  
 (60,395) 
$9,468,667  
$(48,718) 
$(10,035,537) 
$1,333  
$(673,972)

Net income 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 44,550  
 —  
 44,550 

Investment from stockholder 
 —  
 —  
 —  
 —  
 —  
 —  
 150,000  
 —  
 —  
 —  
 150,000 

Currency translation adjustment 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 337  
 337 

Share issuance 
 —  
 289,104,000  
 —  
 —  
 2,891  
 —  
 2,337,046  
 —  
 —  
 —  
 2,339,937 

Share offering costs 
 —  
 —  
 —  
 —  
 —  
 —  
 (90,478) 
 —  
 —  
 —  
 (90,478)

Share-based
    payment 
 —  
 360,000  
 —  
 —  
 4  
 —  
 35,996  
 —  
 —  
 —  
 36,000 

Balance March 31, 2023 
 545,386  
 291,563,930  
 (473) 
$54  
$3,519  
 (60,395) 
$11,901,231  
$(48,718) 
$(9,990,987) 
$1,670  
$1,806,374 

Net income 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 1,564,538  
 —  
 1,564,538 

Currency translation adjustment 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 (1,670) 
 (1,670)

Offset with
    due to related party balance 
 —  
 —  
 —  
 —  
 —  
 —  
 —  
 48,718  
 —  
 —  
 48,718 

Balance March 31, 2024 
 545,386  
 291,563,930  
 (473) 
$54  
$3,519  
 (60,395) 
$11,901,231  
$—  
$(8,426,449) 
$—  
$3,417,960 

 
*Retrospectively applied for effect of Forward
stock split on April 5, 2024
See accompanying notes
to consolidated financial statements.
 

F-5
 

 
QDM INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2024 AND 2023
  


  
March 31, 2024  
March 31, 2023 

  
   
  

Cash flows from operating activities: 
   
  

Net income 
$1,564,538  
$44,550 

Adjustments to reconcile net loss to net cash used in operating
    activities: 
    
   

Depreciation 
 35,622  
 8,075 

Gain from disposition of subsidiaries 
 (33,165) 
 — 

Share-based payment expense 
 —  
 36,000 

Non-cash lease expenses 
 4,900  
 — 

Changes in working capital: 
    
   

Accounts receivable 
 108,288  
 (289,426)

Prepaid expenses 
 (84,548) 
 — 

Long-term prepaid expenses 
 (31,862) 
 — 

Accounts payable & accrued liabilities 
 344,028  
 208,374 

Income tax payable 
 309,043  
 — 

Due to a related party 
 (8,807) 
 4,240 

Net cash provided by operating activities 
 2,208,037  
 11,813 

  
    
   

Cash flows from investing activities: 
    
   

Purchase of property and equipment 
 (92,693) 
 (17,503)

Disposition of subsidiaries 
 (7,548) 
 — 

Net cash used in investing activities 
 (100,241) 
 (17,503)

  
    
   

Cash flows from financing activities: 
    
   

Proceeds borrowed from related parties 
 332,886  
 223,972 

Share issuance proceeds 
 —  
 2,339,937 

Issuance costs related to equity financing 
 —  
 (60,478)

Contribution from stockholders 
 —  
 150,000 

Net cash provided by financing activities 
 332,886  
 2,653,431 

  
    
   

EFFECT OF EXCHANGE RATE CHANGES ON CASH 
 (204) 
 346 

NET INCREASE IN CASH 
 2,440,478  
 2,648,087 

CASH, BEGINNING OF PERIOD 
$2,717,745  
$69,658 

CASH, END OF PERIOD 
 5,158,223  
 2,717,745 

  
    
   

SUPPLEMENTAL DISCLOSURES: 
    
   

Non-cash transaction 
    
   

Non-cash offset of subscription receivable
    with due to related party balance 
$48,718  
$— 

ROU obtained in exchange for new operating
    lease 
$220,975  
$— 

Cash paid for interest 
$—  
$— 

Cash paid for income taxes 
$—  
$— 

 
See accompanying notes to consolidated financial
statements.
 

F-6
 

 
QDM International Inc.
Notes to Consolidated Financial Statements
 
1. Organization and principal activities
 
QDM International Inc. (“QDM,” and
collectively with its subsidiaries, the “Company”) was incorporated in Florida in March 2020 and is the successor to 24/7
Kid Doc, Inc. (“24/7 Kid”), which was incorporated in Florida in November 1998. The Company conducts its business through
an indirectly wholly owned subsidiary, YeeTah Insurance Consultant Limited, which changed its name to Hong Kong YeeTah Insurance Broker
Limited (“YeeTah”) in December 2022, a licensed insurance brokerage company located in Hong Kong, China. YeeTah sells a wide
range of insurance products, consisting of two major categories: (1) life and medical insurance, such as individual life insurance; and
(2) general insurance, such as automobile insurance, commercial property insurance, liability insurance, homeowner insurance. In addition,
as a Mandatory Provident Fund (“MPF”) Intermediary, YeeTah also assists its customers with their investment through the MPF
and the Occupational Retirement Schemes Ordinance schemes (“ORSO”) in Hong Kong, both of which are retirement protection
schemes set up for employees.
 
On October 21, 2020, the Company entered into
a share exchange agreement (the “Share Exchange Agreement”) with QDM Holdings Limited, a BVI company (“QDM BVI”),
and Huihe Zheng, the sole shareholder of QDM BVI (the “QDM BVI Shareholder”), who is also the Company’s principal stockholder,
Chairman and Chief Executive Officer, to acquire all the issued and outstanding capital stock of QDM BVI in exchange for the issuance
to the QDM BVI Shareholder 30,000 shares (900,000 shares before the Reverse Split (as defined below)) of a newly designated Series C
Convertible Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”), with each Series C Preferred Stock
initially being convertible into 11 shares of the Company’s common stock, par value $0.0001 per share, subject to certain adjustments
and limitations (the “Share Exchange”). The Share Exchange closed on October 21, 2020.
 
As a result of the consummation of the Share
Exchange, the Company acquired all the issued and outstanding capital stock of QDM BVI and its subsidiaries, QDM Group Limited, a Hong
Kong corporation and wholly owned subsidiary of QDM BVI (“QDM HK”) and YeeTah.
 
The Company was a shell company prior to the
reverse acquisition which occurred as a result of the consummation of the transaction contemplated by the Share Exchange Agreement, and
QDM BVI was a private operating company. The reverse acquisition by a non-operating public shell company of a private operating company
typically results in the owners and management of the private company having actual or effective voting and operating control of the
combined company. Therefore, the reverse acquisition is considered a capital transaction in substance. In other words, the transaction
is a reverse recapitalization, equivalent to the issuance of stock by the private company for the net monetary assets of the shell company
accompanied by a recapitalization. Therefore, the acquisition was accounted for as a recapitalization and QDM BVI is considered the acquirer
for accounting and financial reporting purposes. The assets and liabilities of QDM BVI have been brought forward at their book value
and no goodwill has been recognized.
 
Accordingly, the reverse acquisition has been
treated as a corporate restructuring (reorganization) of entities under common control and thus the current capital structures of QDM
BVI and its wholly-owned subsidiary QDM HK and its wholly-owned subsidiary, YeeTah, have been retrospectively presented in prior periods
as if such structures existed at that time and in accordance with ASC 805-50-45-5.
 
As a result of the Share Exchange, the Company
ceased to be a shell company. 


F-7
 

   
On November 3, 2021,
the Company acquired 100% of the issued and outstanding shares of QDMI Software Group Limited (“QDMS”), a company incorporated
on February 6, 2020 in Cyprus. The Company acquired QDMS through an intermediary holding company, Lutter Global Limited (“LGL”),
which was incorporated on July 29, 2021 in the BVI. Before the acquisition, Huihe Zheng was the sole shareholder of QDMS. As part of
the acquisition, Mr. Zheng sold all the shares of QDMS to LGL for a consideration of EUR5,000 in November 2021 and at the same time the
sole shareholder of LGL, Mengting Xu, transferred all her shares in LGL to the Company for a consideration of US$1.00. As a result, the
Company acquired a 100% ownership of LGL, which, in turn, owned 100% of QDMS. Accordingly, the acquisition was treated as a corporate
restructuring (reorganization) of entities under common control and thus the current capital structures of QDMS and LGL were retrospectively
presented in prior periods as if such structures existed at that time and in accordance with ASC 805-50-45-5. On October 4, 2023, the
Company sold QDMS to Mr. Zheng for no consideration. As a result of the disposition, the Company recognized a gain of $33,165. In 2022,
24/7 Kid was administratively dissolved with the State of Florida.
 
2. Summary of significant accounting policies
 
Basis of Presentation
 
The Company’s consolidated financial statements
have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
 
Use of Estimates
 
The preparation of the Company’s consolidated
financial statements in conformity with the U.S. GAAP requires the Company to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
The reported amounts of revenues and expenses may be affected by the estimates that management is required to make. Actual results could
differ from those estimates.
 
Changes in facts and circumstances may cause
the Company to revise its estimates. The Company bases its estimates on historical experience and on various other assumptions that are
believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
The following are some of the areas requiring significant judgments and estimates as of March 31, 2024 and March 31, 2023: discount rate
used in calculation of right-of-use assets and lease liability, valuation assumptions in performing asset impairment tests of long-lived
assets, etc.  



F-8
 

 
Foreign Currency and Foreign Currency Translation
 
The Company’s reporting currency is the
United States Dollar (“US$” or “$”). The Company’s operations are principally conducted in Hong Kong where
Hong Kong dollar is the functional currency. The functional currency of the Company’s two subsidiaries, Lutter Global Limited and
QDMI Software Group Limited, is the Euro.
 
Transactions denominated in other than the functional
currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary
assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency
at the prevailing rates of exchange at the balance sheet date. The resulting exchange differences are reported in the statements of operations
and comprehensive loss.
 
The exchanges rates used for translation from
Hong Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system in Hong Kong. This pegged rate was used
to translate Company’s balance sheets, income statement items and cash flow items for both the years ended March 31, 2024 and 2023.
 
The exchanges rates used for translation from
Euro to US$ are as follows:
  


  
October 4,  2023 
March 31,  2023

Year-end spot rate 
EUR 1 = US$1.0518 
EUR 1 = US$1.0872

Average rate for the year 
EUR 1 = US$1.0877 
EUR 1 = US$1.0414

 
Measurement of credit losses on financial instruments
 
On April 1, 2022, the Company adopted ASU 2016-13,
“Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial Instruments,” for
financial assets at amortized cost including accounts receivable, refundable deposits, other receivables, and retention receivable. This
guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses” to estimate
credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information
to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be collected. The
allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the net carrying value
at the amount expected to be collected on the financial asset.
 
Certain Risks and Concentration
 
The Company’s financial instruments that
potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and receivables,
and other assets. As of March 31, 2024, substantially all of the Company’s cash and cash equivalents were held in major financial
institutions located in Hong Kong, which management considers to being of high credit quality.
 
During the year ended March 31, 2024, the largest customer accounted
for 97% of the Company’s total revenue. During the year ended March 31, 2023, the largest customer accounted for 91% of the Company’s
total revenue.
 
During the year ended March 31, 2024, the three largest supplier (sub-broker)
accounted for 52%, 27% and 15% of the Company’s total costs of sale respectively. During the year ended March 31, 2023, the largest
supplier (sub-broker) accounted for 93% of the Company’s total costs of sale.
 
Cash and Cash Equivalents
 
Cash and cash equivalents consist of petty cash
on hand and cash held in banks, which are highly liquid and have original maturities of three months or less and are unrestricted as
to withdrawal or use.
 
Accounts Receivable
 
Accounts receivable represents trade receivable and are recognized
initially at fair value and subsequently adjusted for any allowance for expected credit loss. 


F-9
 

  
The Company evaluates the expected credit loss
of accounts receivable based on historical collection experience, the financial condition of its customers and assumptions for the future
movement of different economic drivers and how these drivers will affect each other. The Company writes off potentially uncollectible
accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected or if a settlement
with respect to a disputed receivable is reached for an amount that is less than the carrying value.
 
The Company historically did not have material
bad debts in accounts receivable and management believed that there were no expected credit loss for doubtful accounts. There were no
provision for credit loss for doubtful accounts for the years ended March 31, 2024 and 2023 and there was no allowance for credit loss
as of March 31, 2024 and 2023.
 
Revenue Recognition
 
The Company generates revenue primarily by providing
insurance brokerage services in Hong Kong. The Company sells insurance products underwritten by insurance companies operating in Hong
Kong to its individual customers and is compensated for its services by commissions paid by insurance companies, typically based on a
percentage of the premium paid by the insured.
 
ASC 606 provides for a five-step model for recognizing
revenue from contracts with customers. These five steps include:
  


 
(i)
Identify the contract

 
 
 

 
(ii)
Identify performance obligations

 
 
 

 
(iii)
Determine transaction price

 
 
 

 
(iv)
Allocate transaction price

 
 
 

 
(v)
Recognize revenue

  
The Company enters into insurance brokerage contracts
with customers (insurance companies). Performance obligation for these insurance brokerage contracts is to help insurance company customers
to promote, coordinate and complete subscriptions of insurance policies offered by customers.
 
Under ASC 606, revenue is recognized when the
customer obtains control of a good or service. A customer obtains control of a good or service if it has the ability to direct the use
of and obtain substantially all of the remaining benefits from that good or service. The transfer of control of the Company’s brokerage
services generally occurs at a point in time on the effective date of the associated insurance contract when the policy transfers to
the customer. The insurance policy entered between the insurance company and the insured customer generally contains a cool-off period
of one to two months. When the cool-off period elapses and the insured customer does not withdraw from the insurance policy, the policy
becomes effective. Once the transfer of control of a service occurs, the Company has satisfied its insurance brokerage performance obligation
and recognizes revenue. 


F-10
 

   
Fair Value Measurement
 
Fair value is the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.
 
The established fair value hierarchy requires
an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. The three levels of inputs that may be used to measure fair value as follows:
 


 
Level 1:
Quoted prices (unadjusted) in active markets for identical assets
    or liabilities.

 
 
 

 
Level 2:
Observable, market-based inputs, other than
    quoted prices, in active markets for identical assets or liabilities.

 
 
 

 
Level 3:
Unobservable inputs to the valuation methodology
    that are significant to the measurement of the fair value of the assets or liabilities.

 
The Company’s financial instruments include
cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, lease liabilities and due to related party.
The carrying amounts of these financial instruments approximate their fair values due to the short-term nature of these instruments. For
lease liabilities, fair value approximates their carrying value at the period end as the interest rates used to discount the host contracts
approximate market rates.
 
The Company noted no transfers between levels
during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring
basis as of March 31, 2024 and March 31, 2023, respectively..
 
Property and Equipment
 
Property and equipment are recorded at cost,
less accumulated depreciation and impairment. Depreciation of property and equipment is calculated on a straight-line basis, after consideration
of expected useful lives and estimated residual values. The estimated annual deprecation rate of these assets are generally as follows:
  
  Category  Depreciation rate  Estimated residual value  Office equipment  3 years  Nil  Leasehold improvements  Shorter of lease term or 3 years  Nil 
  
Expenditures for maintenance and repairs are
expensed as incurred. Gains and losses on disposals are the differences between net sales proceeds and carrying amount of the relevant
assets and are recognized in the statements of operations and comprehensive loss.
 
Impairment of Long-Lived Assets
 
The Company evaluates its long-lived assets for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability
is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it
is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets
exceeds the expected discounted cash flows arising from those assets.
 
There were no impairment losses for
the years ended March 31, 2024 and 2023. 


F-11
 

  
Leases
 
Arrangements meeting the definition of a lease
are classified as operating or finance leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease
liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s
incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset
is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset
result in straight-line rent expense over the lease term.
 
In calculating the right of use asset and lease
liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases
having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line
basis over the lease term.
 
Taxation
 
Current income taxes are provided on the basis
of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income
tax purposes, in accordance with the regulations of the relevant tax jurisdictions.
 
Deferred income taxes are recognized for temporary
differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, net operating loss
carryforwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely
than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with
the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to
taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities
of changes in tax rates is recognized in the statement of operations and comprehensive income in the period of the enactment of the change.
 
The Company considers positive and negative evidence
when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers,
among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration
of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate
realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward
periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization
of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing
taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future
taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected
within the industry.
 
The Company recognizes a tax benefit associated
with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination
by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently
measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate
settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically
due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments
are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of
changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company
classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. 


F-12
 

  
Stock-Based Compensation
 
The Company recognizes stock-based compensation
in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting from all share-based transactions be recorded
in the financial statements. It establishes fair value as the measurement objective in accounting for share-based payment arrangements
and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees.
ASC 718 also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from
non-employees in share-based payment transactions.
 
Related party transactions
 
In general, related parties exist when there
is a relationship that offers the potential for transactions at less than arm’s-length, favorable treatment, or the ability to
influence the outcome of events different from that which might result in the absence of that relationship. A related party may be any
of the following: a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control
with another party; b) a principle owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity;
c) management, which are persons having responsibility for achieving objectives of the entity and requisite authority to make decision;
d) immediate family of management or principal owners; e) a parent company and its subsidiaries; and f) other parties that have ability
to significant influence the management or operating policies of the entity. 
 
Earnings per share
 
Basic earnings per share is computed by dividing
net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period
using the two-class method. Under the two-class method, net income is allocated between shares of common stock and other participating
securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual
terms they are not obligated to share in the losses. Diluted earnings per share is calculated by dividing net income attributable to
holders of common stock by the weighted average number of common and dilutive common equivalent shares outstanding during the period.
Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares
would be anti-dilutive.
 
Recently Issued Accounting Standards
 
The Company has reviewed all the recent accounting
pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have
a material impact on the Company.
 
3. Equity
 
Forward Stock Split
 
On April 5, 2024, the
Company effected a forward split of its issued and outstanding shares of common stock at a ratio of 10-for-1 (the “Forward Stock
Split”). As a result of the Forward Stock Split, each issued and outstanding share of the Company’s common stock prior to
the effective time of the Forward Stock Spilt are split into ten shares of common stock and the total number of issued and outstanding
shares of common stock increases from 29,156,393 shares to 291,563,930 shares. The Forward Stock Split has no impact on the Company’s
issued and outstanding shares of preferred stock other than that the conversion rate and voting rights of our Series C Convertible Preferred
Stock will be proportionately adjusted. The Forward Stock Split has been retrospectively applied to the financial statements for the
fiscal years ended March 31, 2024 and 2023
 
Yeetah is a licensed insurance broker company in Hong Kong and subject
to certain Hong Kong insurance broker requirements regarding its share capital and net assets. As per the requirements, a licensed insurance
broker company must at all times maintain a paid-up share capital of not less than USD64,103 (HK$500,000) and net assets of not less than
USD64,103 (HK$500,000), subject to the phase-in transitional arrangements applicable to specified insurance
broker companies, including Yeetah, pursuant to which, Yeetah is required to maintain the amount of paid-up share capital and net assets
of (i) not less than USD12,821 (HK$100,000) for the period from September 23, 2019 to December 31, 2021 and (ii) not less than USD38,462
(HK$300,000) for the period from January 1, 2022 to December 31, 2023. Yeetah was in compliance with the applicable minimum paid-up share
capital and net assets requirements as of March 31, 2024. 



F-13
 

 
Common Stock
   
In March, 2023, the Company consummated a closing of a public offering
of its common stock, par value $0.0001 per share (the “2023 Offering”), in which the Company issued and sold an aggregate
of 289,104,000 shares of its common stock at a price of $0.081 per share to certain investors, generating gross proceeds to the Company
of $2,339,937. Share offering costs of $90,478  were offset against the share capital in relation to the 2023 Offering.
 
In March, 2023, the Company also granted 36,000
shares to certain executives and directors of the Company for their services rendered. The fair value of the shares granted is $36,000
determined by using the trading price  on the grant date and the amount is recognized as shared-based payment expense for the year
ended March 31, 2023.
 
There were no treasury stock transactions during
the years ended March 31, 2024 and 2023.
 
Additional paid-in-capital 
 
During the year ended March 31, 2022, Mr. Zheng,
the Company’s principal stockholder, Chairman and Chief Executive Officer, forgave $25,641 related party balance due from
YeeTah, which is treated as a capital transaction.
 
On July 22, 2022, Huihe Zheng invested additional
share capital of $150,000 (HKD$1,170,000) into Company’s subsidiary, YeeTah. The additional contribution was recorded into additional
paid-in-capital.
  
4. Related Party Transaction
 
Related Parties
  
  Name of related parties    Relationship with the Company  Siu Ping Lo   Responsible officer of YeeTah  Huihe Zheng   Principal stockholder, Chief Executive Officer and Chairman of the Company  YeeTah Financial Group Co., Ltd. (“YeeTah Financial”)   A company previously controlled by Siu Ping Lo  Ouya Properties Group Ltd. (“OPG”)   A company controlled by Huihe Zheng  Tim Shannon   Chief Financial Officer  


F-14
 

  
Related Party Transactions
  
    (i) During the year ended March 31, 2024, YeeTah Financial no longer is a related party to the Company since YeeTah Financial is no longer controlled by Siu Ping Lo. During the year ended March 31, 2023, YeeTah Financial charged YeeTah US$43,586 commission expenses in relation to insurance referral services rendered by YeeTah Financial.           (ii) During the year ended March 31, 2024, Huihe Zheng advanced US$244,313 (2023: US$220,350) to the Company to support its operations.           (iii) During the year ended March 31, 2024, OPG advanced nil (2023: US$3,202) to the Company to support its operations. 
  
Due to Related Party Balance
 
The Company’s due to related party balance
is as follows:
 


  
March 31, 2024  
March 31, 2023 

  
US$  
US$ 

Huihe Zheng 
 1,283,221  
 1,035,730 

OPG 
 —  
 3,202 

YeeTah Financial 
 —  
 8,176 

Total 
 1,283,221  
 1,047,108 

  
The due to related party balance is unsecured,
interest-free and due on demand.
 
Subscription Receivable Due from a Stockholder
 
The Company’s subscription receivable due
from a stockholder balance is as follows:
  


  
March 31, 2024  
March 31, 2023 

  
US$  
US$ 

Huihe Zheng 
 —  
 48,718 

  
The due from stockholder balances represent the
purchase price for shares of QDM BVI to be paid by Mr. Huihe Zheng. The due from a stockholder balance as of March 31, 2023 was unsecured,
interest-free and due on demand. The subscription receivable from Mr. Huihe Zheng has been offset with the balance that the Company owed
to him.
 

F-15
 

 
5. Income Taxes
 
Hong Kong
 
Under the current Hong Kong Inland Revenue Ordinance,
the Company’s Hong Kong subsidiaries are subject to a 16.5% income tax on their taxable income generated from operations in Hong
Kong. On December 29, 2017, Hong Kong government announced a two-tiered profit tax rate regime. Under the two-tiered tax rate regime,
the first HK$2.0 million assessable profits will be subject to a lower tax rate of 8.25% and the excessive taxable income will continue
to be taxed at the existing 16.5% tax rate. The two-tiered tax regime becomes effective from the assessment year of 2018/2019, which
was on or after April 1, 2018. The application of the two-tiered rates is restricted to only one nominated enterprise among connected
entities.
 
BVI
 
Under the current laws of the BVI, the Company
is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no BVI withholding tax
will be imposed.
 
Cyprus
 
Under the current laws of the Cyprus, the Company’s
Cyprus subsidiary is subject to a standard income tax rate of 12.5% on income accrued or derived from all sources in Cyprus and abroad.
 
US
 
Under the current Florida state and US federal
income tax, the Company does not need to pay income taxes as Florida state does not levy income tax. The federal income tax is based
on a flat rate of 21% for the calendar year of 2024 (2023: 21%).
 
Reconciliation of the differences between statutory tax rate
and the effective tax rate
 
The Company operates in serval tax jurisdictions.
Therefore, its income is subject to various rates of taxation. The income tax expense differs from the amount that would have resulted
from applying the US statutory income tax rates to the Company’s pre-tax income as follows:
  


  
March 31,  2024  
March 31,  2023 

  
US$  
US$ 

Income before income tax expenses 
 1,873,581  
 44,550 

US federal statutory income tax rate 
 21% 
 21%

Income tax calculated at statutory rate 
 393,452  
 9,356 

(Increase) decrease in income tax expense resulting from: 
    
   

Rate differences in various jurisdictions 
 (6,727) 
 (32,862)

Non-deductible expenses 
 —  
 7,560 

Loss carried forward 
 (50,107) 
 37,722 

Tax loss utilized 
 (27,575) 
 (21,776)

Income tax expense 
 309,043  
 — 

   
As of March 31, 2024 and 2023, there was net operating loss (“NOL”)
carryforward of $150,241 and $106,555 respectively and they can be carried forward indefinitely. Fully valuation allowance has been provided
to these NOLs as of March 31, 2024 and 2023 as the Company did not believe these NOLs will more likely than not be realized in foreseeable
future.
 
Uncertain tax positions
 
The Company evaluates each uncertain tax position
(including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits
associated with the tax positions. As of March 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.
 


F-16
 

 
6. Commitments and Contingencies
 
Other than two office leases both with a lease
term of 3 years that the Company entered into in February 2022 (the “2022 Office Lease”) and in April 2023 (the “2023
Office Lease”) as described below, the Company did not have significant commitments, long-term obligations, or guarantees as of
March 31, 2024 and 2023.
 
Operating lease
 
The 2022 Office Lease has a remaining lease
term of the operating lease of 0.9 years and discount rate used for the operating lease is 4.9%.
 
The 2023 Office Lease has a remaining lease
term of the operating lease of 2.1 years and discount rate used for the operating lease is 10.34%.
 
During the years ended March 31, 2024 and
2023, the operating lease expense recognized was $121,980 and $42,172 respectively.
 


  
2022 Office Lease  
2023  Office Lease  
Total 

2025 
 35,143  
 88,745  
 123,888 

2026 
 —  
 88,745  
 88,745 

2027 
 —  
 6,441  
 6,441 

Total future minimum lease payments 
$35,143  
$183,931  
$219,074 

Less: imputed interest 
 (777) 
 (19,012) 
 (19,789)

Total operating lease
    liability 
$34,366  
$164,919  
$199,285 

Less: operating lease liability – current 
 34,366  
 75,190  
 109,556 

Total operating lease liability – non current 
$—  
$89,729  
$89,729 

 
Contingencies
 
The Company is subject to legal proceedings and
regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company
does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our business, financial
position, cash flows or results of operations taken as a whole. As of March 31, 2024, the Company is not a party to any material legal
or administrative proceedings.
 
7. Subsequent Events
 
On April 5, 2024, the Company effected a forward
split of its issued and outstanding shares of common stock at a ratio of 10-for-1 (the “Forward Stock Split”). As a result
of the Forward Stock Split, each issued and outstanding share of the Company’s common stock prior to the effective time of the
Forward Stock Spilt are split into ten shares of common stock and the total number of issued and outstanding shares of common stock increases
from 29,156,393 shares to 291,563,930 shares. The Forward Stock Split has no impact on the Company’s issued and outstanding shares
of preferred stock other than that the conversion rate and voting rights of our Series C Convertible Preferred Stock will be proportionately
adjusted. The Forward Stock Split has been retrospectively applied to the financial statements for the fiscal years ended March 31, 2024
and 2023.

 
 
F-17
 



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